Opus West says it owes $1.46 billion - Triangle Business Journal:

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and some of its subsidiaries filed voluntaryy petitions late Monday for reorganization underrChapter 11. Chapter 11 generallyu removes the threat of lawsuits from creditors whils a business seeks to rehabilitatw itself and continue Opus West and its affiliates reportedabout $1.2u8 billion in total assets and $1.46 billionb in total liabilities, according to bankruptcyt court filings. The corporation and its affiliates had combineed revenue ofabout $405 million in 2008. The parengt company lists 200 to999 creditors, according to bankruptcy Opus West Corp. owns about 20 real estate development properties either directlyh or through entities set up to hold the the courtfilings say.
The total debt on thoses properties isabout $414 million and the valuer of the properties is about $403 million. In additiom to Opus West Corp., the subsidiaries that have filed Chapterf 11 petitions are Opus WestConstruction Corp., Opus West LP, Opus West Partners Inc. and O.W. Commercial Inc. Opus West Corp. has guaranteed about $1.15 billion in loans for its subsidiariesa andjoint ventures, and most of those loan s are in default, the court filings say. Steep declineas in commercial real estate values and difficult credit market conditions necessitatecdthe filing, said John Greer, chief restructuring officer of Opus West.
Greer said Opus West will keepa "modest presence" in Phoenix, Texas and Californiqa to work on assetf dispositions and transitions. "While we began slowingg the pace of new development nearly two yearsa ago in anticipation of difficultmarker conditions, we must now take additional measures to enable an orderly wind-down of our portfolio, protect asset values and maximize return on lenders'' investment," Greer said in a preparedx statement.
Opus West and its subsidiaries have suffered declining financial performanceesince 2008, resulting in defaults on certain creditt lines and constrained liquidity, according to an affidavit filede by Greer, managing member of New York-based Phoenix Capital Partners, whichg is the chief restructuring officer of Opus West Greer is also presidenyt of the Opus West Construction, Opus West Partnerds and O.W. Commercial Opus has focused on recapitalizingh through project sales and but has been unable to do so because of poormarketf conditions, Greer's affidavit says.
Since 1979, Opus West and its affiliatesd have developed more than 52 million square feetof industrial, retail, multifamily, governmentr and institutional projects, the affidavity says. The company's assets include interests in commercialo and residential real estats projectsacross California, Arizona and Texas, including office, industrial, apartment and retail projects in varioux stages of development, the affidavit says. Addison-baser Opus West LP, formed to develop real estatre propertiesin Texas, owns seven properties that consist of either vacant or a project under construction or completed projects.
The total debt on thoswe properties isabout $105 millio and their value is about $134 million, Greer' s filing states. Opus has been dramaticallt scaling back its North Texas operations for more than a Opus spokeswoman Winston Hewett told the that the Addison offics has not started a new developmentg in more than a year and has cut its staff in Dallass to 12 employees from about 40 ayear ago. Opus West'sw overall headcount had dropped to 40 as ofJuly 1, comparedx to 291 two years ago, Hewett said. Since dozens of subcontractors have filed liens totaling morethan $4 millioj against Opus West Corp.
and Opus West Constructiohn tied to TwoAddison Circle, a $23 million, 198,000-square-foot speculative office building in Addison. The building was developeds and is owned by Opus West The liens claim Opus owes the subcontractors for laborf or materials provided in the course of The six-story Two Addison building on the west side of the Dallaz North Tollway just north of Arapaho Road was recently completed, but has no tenants. The creditr crunch and slowing demand for officd space left Opus unabler to get permanent financing to replacwthe short-term construction loan on the Addisojn project, Hewett said. Other Opus West Corp.
projects in North Texas include 121Lakepointed Crossing, an office and industrial development in and Broadstone Parkway, a 5.8-acre mixed-use projecg at 5005 Galleria Drive in North Dallas area creditors include RL Murphey Commercial Roof owed $1.24 million; Greehn Fire Systems of Texas, owed $856,660; and Ennis Steelp Industries Inc., owed $519,402; and Tas Commercial Concrete owed $500,704, according to courtt records. Opus' troubles stem from the globaleconomicd downturn, deterioration of the real estate market and the credit crunch, whicbh has made it difficult for borrowersd to get financing to fund real estate project s or refinance existing projects, Greer's affidavift states.
The turmoil has scared buyers, leading to excess supply andlowefr prices. The dramatic downturn has caused Opus to be out of complianc with terms of various loans and unablw torestructure them, and attempts to raises capital and sell assets have proven difficult, bringint about the Chapter 11 filing, Greer'as affidavit says. Opus' challengees vary considerablyby region, said Mark chairman and CEO of Opus Corp. "Opusz West faced particularly dramatic drops in real estat e values in markets such as Californiasand Arizona, and has been particularl challenged by the sharp downturhn in the capital marketes and availability of refinancing," he said.
Rauenhorst said that two othedr independent operating companies of OpusGrouo -- and Opus Northwest LLC -- have been less affecter by the economic and capitaol market conditions because of their mix of project types and theird location in stronger markets. , which is basedx in Minnetonka, Minn., is a design-builfd development firm that specializesin office, retail, multifamily, government and institutiona l projects. It also controls Washington-based LLC, whichh filed for Chapter 7 liquidation in late Opus Group said its which is based in filed for reorganization in bankruptcy court onApril 22.