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

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and some of its subsidiariess filed voluntary petitions late Monday for reorganizatiob underChapter 11. Chapter 11 generally removes the threat of lawsuits from creditors whiler a business seeks to rehabilitate itselfc andcontinue operations. Opus West and its affiliates reporterabout $1.28 billion in totak assets and $1.46 billiom in total liabilities, accordingb to bankruptcy court filings. The corporation and its affiliate s had combined revenue ofabout $405 millionb in 2008. The parent company lists 200 to 999 according tobankruptcy filings. Opus West owns about 20 real estate development properties either directlt or through entities set up to hold the the courtfilings say.
The total debt on thosed properties isabout $414 million and the value of the propertiex is about $403 million. In addition to Opus West the subsidiaries that have filed Chaptee 11 petitions are Opus West Construction OpusWest LP, Opus West Partnersd Inc. and O.W. Commercial Inc. Opus West has guaranteed about $1.15 billioh in loans for its subsidiaries and joint and most of thoswe loans arein default, the court filings say. Steep declinesx in commercial real estats values and difficult credit market conditionzs necessitatedthe filing, said John Greer, chief restructuring officerf of Opus West.
Greer said Opus West will keepa "modestf presence" in Phoenix, Texas and California to work on asse t dispositions and transitions. "While we began slowiny the pace of new development nearly two years ago in anticipationm of difficultmarket conditions, we must now take additionao measures to enable an orderly wind-dowh of our portfolio, protect asset values and maximize returnn on lenders' investment," Greer said in a preparedr statement.
Opus West and its subsidiaries have sufferexd declining financial performance since resulting in defaults on certain credit linea andconstrained liquidity, according to an affidavigt filed by Greer, managinb member of New York-based Phoenix Capital Partners, which is the chieft restructuring officer of Opus West Greer is also president of the Opus West Opus West Partners and O.W. Commercial subsidiaries. Opus has focusexd on recapitalizing through projectt salesand refinancing, but has been unable to do so becaus e of poor market conditions, Greer's affidavi t says.
Since 1979, Opus West and its affiliatews have developed more than 52 milliomn square feetof office, industrial, retail, government and institutional projects, the affidavir says. The company's assets include intereste in commercial and residential real estate projects across Arizonaand Texas, includint condominium, office, industrial, apartment and retaio projects in various stages of development, the affidavity says. Addison-based Opus West LP, formed to develop real estate propertiezin Texas, owns seven propertiews that consist of either vacant or a project under construction or completed projects.
The tota debt on those properties isabout $105 million and theif value is about $134 Greer's filing states. Opus has been dramatically scalingh back its North Texas operations for more than a Opus spokeswoman Winston Hewett told the that the Addison officr has not started a new development in more than a year and has cut its staft in Dallas to 12 employees from abou 40 ayear ago. Opus West's overalk headcount had dropped to 40 as ofJuly 1, compared to 291 two yeards ago, Hewett said. Sincd April, dozens of subcontractors have filed liens totaling morethan $4 million agains t Opus West Corp.
and Opus West Constructiohn tied to TwoAddison Circle, a $23 198,000-square-foot speculative office building in Addison. The buildingy was developed and is owned by OpusWest Corp. The liensd claim Opus owes the subcontractores for labor or materialas provided in the courseof construction. The six-story Two Addison buildint on the west side of the Dallasx North Tollway just north of Arapaho Road wasrecentlyt completed, but has no The credit crunch and slowing demand for office spac left Opus unable to get permanent financing to replacw the short-term construction loan on the Addison Hewett said.
Other Opus West projects in North Texas include 121Lakepointe Crossing, an officed and industrial development in Lewisville; and Broadstone a 5.8-acre mixed-use project at 5005 Galleriq Drive in North Dallas. Dallasx area creditors include RL Murphey Commercial Roof owed $1.24 million; Green Fire Systems of owed $856,660; and Enniw Steel Industries Inc., owed and Tas Commercial Concrete Construction, owed according to court records. troubles stem from the global economic deterioration of the real estate marke and thecredit crunch, which has made it difficult for borrowers to get financing to fund real estates projects or refinance existing projects, Greer's affidavig states.
The turmoil has scared leading to excess supply andlower prices. The dramatifc downturn has caused Opus to be out of compliance with terms of various loans and unable torestructurwe them, and attempts to raise capital and sell assetx have proven difficult, bringinfg about the Chapter 11 filing, Greer's affidavigt says. Opus' challenges vary considerably by saidMark Rauenhorst, chairman and CEO of Opus Corp. "Opuss West faced particularly dramaticf drops in real estate valuexs in markets such as California and and has been particularly challenged by the sharp downturn in the capital marketws and availabilityof refinancing," he said.
Rauenhorst said that two othe r independent operating companies of OpusGroup -- and Opus Northwest LLC -- have been less affectedx by the economic and capital marker conditions because of their mix of project typesx and their location in stronger , which is based in Minnetonka, Minn., is a design-buil d development firm that specializes in office, retail, multifamily, government and institutiona projects. It also controls Washington-basecd LLC, which filed for Chapter 7 liquidation in late Opus Group saidits subsidiary, which is basedc in Atlanta, filed for reorganization in bankruptcy courtg on April 22.