Recent bankruptcy filings by several limited partnerships were linked to a distinguished Nashville-based developer. The 15 partnerships listed noted T.E. Newton as Fifteen Properties, Inc. President and the sole general partner. Newton is a principal with the group Newton Oldacre McDonald (NOM).

Nashville’s Federal Bankruptcy Court reflects that owners of commercial properties are feeling the effects of the recession. Retail stores closing their doors or tenants lagging behind on their rent have had a profound effect on the owners. Owners of such properties are now struggling to pay the mortgage. Some are able to stay afloat by reducing rents and cutting back in amenities. Others, due to debt and fewer tenants, are filing for bankruptcy.

Typical of other commercial bankruptcy filings, the 15 properties had more debt than they could pay; although, the plan was to restructure the debt and continue business as usual.

Included in NOM’s Franklin location properties are a strip mall with a Jiffy Lube and Rite Aid drugstore, among other tenants. Other NOM properties in the filings are located in six states – Tennessee, Mississippi, Louisiana, Kentucky, Florida and Alabama. Some of the properties have lost tenants, like Winn-Dixie supermarkets, Goody’s department stores and Hollywood Video.

Total assets of the listed properties are around $37.5 million. Property values would be higher if it weren’t for the recent harsh decline in real estate values. Liabilities total $75 million for the company.

Commercial borrowers are declaring bankruptcy at increased numbers in order to protect their equity. NOM’s properties, separate from NOM’s main business, were financed using commercial mortgage-backed securities. Analysts predict defaults could cause astronomical effects similar to the subprime home mortgage fallout.

Commercial borrowers are victims of the current volatile economic environment, but re-posturing through Chapter 11 Bankruptcy reorganization should enable retailers and their customers a segway to a more stable business environment. The thought for NOM is that re-posturing should have no negative effect on the firm’s other projects and properties.

Other Newton Oldacre development projects are the Nashville West retail center and a co-ownership of offices with others, including developer John Rochford. According to Rochford, the bankruptcy filing has had no impact on partnership relationships.