New information out of Pennsylvania shows that the bankruptcy-related debts of the owner of Norton Oil may be much higher than initially anticipated. The man is reportedly facing some $2.3 million in unsecured debtor claims after his company suddenly closed. That amount is more than three times the initial value quoted in the first iteration of bankruptcy papers. Official reports show that the man and his wife have filed for Chapter 7 bankruptcy in connection with their company's manifold financial problems.
Official reports show that Norton Oil closed shortly after accepting payments from several heating oil customers. Those individuals claim that the heating oil was never delivered. On top of the unsecured claims - several of which are listed as "unknown" - creditors are also looking to recover about $553,000 in secured claims. Those personal liabilities include two mortgages and a vehicle. A final tally shows that the combined debt in the case may reach approximately $2.85 million. In addition to those personal debts, the company owners have reportedly accrued more than $200,000 in business-related debt. That includes legal judgments against the business owner, who was accused of failing to deliver heating oil shipments to customers who had already paid. A church in the area is seeking $26,000 in compensation for heating oil it purchased to heat a low-income apartment building.
In this case, it appears that the man is facing such a significant personal debt because he personally guaranteed about $2 million to Lehigh-area land developers. The company owner never paid the mortgage for two heating-oil storage campuses, according to news reports. The owner who sold him the land is optimistic that he will be able to recover the properties, however, and he plans to convert at least one of the campuses into a hotel.
In some cases, personal bankruptcy and business bankruptcy become enmeshed because of personal guarantees. Those business owners who are filing for bankruptcy for a fresh financial start may benefit from speaking with a qualified Pennsylvania bankruptcy attorney who can help them learn more about their individual and business rights.
Source: The Express-Times, "Richard Norton, owner of Norton Oil Co., debt higher than first indicated, may top $2.8 million, records say" Matthew Bultman, Dec. 26, 2013