Recently filed court papers indicate the liabilities of Richard Norton, owner of Norton Oil Co., may be significantly higher than indicated during his original bankruptcy filing.
Creditors hold more than $2.3 million in unsecured claims against Norton, whose company abruptly closed after accepting payments for heating oil that customers say was never delivered, and his wife, according to documents filed this week as part of their ongoing Chapter 7 bankruptcy procedure.
That is more than triple the amount indicated in original court papers.
The unsecured claims, however, are likely to be even higher as the amounts owed on several debts are designated as “unknown” in court records.
Besides those claims, previously filed records indicate creditors hold roughly $553,000 in secured claims, including two mortgages totaling about $534,500 on the Nortons’ Palmer Township home and $18,500 on a 2010 Lexus.
Combined, the claims would total more than $2.85 million in liabilities for the Nortons compared to their listed $703,000 in assets.
Norton’s attorney, Charles Laputka, did not return a message seeking comment on the bankruptcy.
Norton and his wife, Lynn, submitted a joint filing for liquidation Dec. 17 in federal court for the Eastern District of Pennsylvania, about a month after Norton Oil shut its doors and left prepaid customers without their purchased oil and without a refund.
In those filings, the couple cited $1.25 million in total liabilities but did not include a list of creditors owed money in the unsecured claims, which was said to be around $704,000.
Submitted to the court Monday, that list indicates there are 86 creditors owed roughly $2.3 million. Those liabilities consist of business debts and bills, money owed on credit cards and expenses Norton had personally guaranteed.
According to the most recent documents, there has been the accumulation of nearly $110,000 in credit card debt on several cards issued in both his and his wife’s name. The largest is a $44,690 bill, in Richard Norton’s name, owed to Bank of America, records say.
Norton has also racked up roughly $208,620 in business-related debt and bills, records say. Among those debts is a small business loan and money owed to several former customers who were awarded judgments last week by a state Superior Court judge in Warren County.
Additionally is a claim for more than $26,000 owed to a West Bethlehem church that prepaid for oil to heat an apartment building it owns for low-income renters.
The largest chunk of unsecured liabilities, however, comes in money that Norton personally guaranteed — at least $1.97 million. The majority of that money, listed in court records as $1.3 million, is owed to developer Joseph Clark and his Allentown-based business, Lehigh Land Developers.
According to Clark, he purchased the mortgage to Norton Oil’s Phillipsburg and Washington campuses two years ago for roughly $1.6 million after the properties were in foreclosure. Clark said today he has yet to receive a payment from Norton and estimated the amount he is owed is near the $1.8 million mark.
“I slowed down on the collection process when I first met him because I liked him,” Clark said. “One thing led to another and the wheels came off.”
While Clark said he remains hopeful he will recoup some of the money from Norton, he is also pursuing plans to redevelop both campuses, including a proposal to turn a portion of the Phillipsburg property into a motel.
“I still think it’s an opportunity,” he said. “The value is there. The management wasn’t there but the value is there.”
A meeting of creditors is scheduled to be held Jan. 13 at the Allentown Federal Courthouse.
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