Boston Developer Files for Bankruptcy Amid Creditor Suits

A Central Massachusetts developer behind some of Worcester’s biggest real estate projects filed for bankruptcy as creditors circle and lawsuits stack up.

Chip Norton, owner and president of Wellesley-based Franklin Realty Advisors, filed for Chapter 7 bankruptcy in June. In the filing, Norton disclosed $1.69 million in debt, but creditors say he owes nearly $70 million from personal guarantees from financing for real estate deals, the Worcester Business Journal reported.

Norton, who has steered more than $200 million in investment across the region since the early 1990s, controls several key Worcester-area properties, including the Mercantile Center, the Worcester Business Center and the Wellsworth Hotel in Southbridge.

The filing in the U.S. Bankruptcy Court for the District of Massachusetts comes as Norton faces a raft of legal challenges.

Creditor Cornerstone Bank sued Norton and his wife in May, alleging the developer shifted ownership of his Dover and Cape Cod homes into his wife’s name to dodge repayment on a $1.6 million loan he personally guaranteed, the Boston Business Journal reported. The couple’s properties are valued at nearly $4 million.

Meanwhile, Worcester-based Lauring Construction says Franklin owes $327,000 for renovations at the Mercantile Center and related entities are pressing Norton over $500,000 in unpaid investments tied to the Wellsworth Hotel. Norton is also named in loan guarantee disputes in Connecticut and New York.

Franklin Realty has been a dominant player in Worcester’s downtown revival, taking on redevelopment projects that helped transform the city’s core after the fall of the old Galleria mall.

Its Mercantile Center — two office buildings with ground-floor retail — became a symbol of that turnaround. But whether Norton’s firm can hold onto those properties is now in doubt as the bankruptcy process progresses.

“The businesses and communities of Worcester and Worcester County have grown abundantly since we began work here in 1992,” said a spokesperson for the developer.

Norton has departed from his role atop FRA, according to the filing, where he listed his occupation as a driver with an estimated monthly income of $1,000.

— Holden Walter-Warner