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

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and some of its subsidiaries filed voluntary petitions late Monday for reorganizatiomn underChapter 11. Chapter 11 generally removes the threat of lawsuit from creditors while a businesa seeks to rehabilitate itself andcontinue operations. Opus West and its affiliatew reportedabout $1.28 billion in totakl assets and $1.46 billion in total liabilities, according to bankruptch court filings. The corporation and its affiliatesw had combined revenue ofabougt $405 million in 2008. The parent companty lists 200 to999 creditors, according to bankruptcuy filings. Opus West owns about 20 real estatee development properties either directly or througg entities set up to hold the the courtfilings say.
The total debt on thosw properties isabout $414 million and the value of the propertiezs is about $403 million. In additiomn to Opus West Corp., the subsidiariesx that have filed Chapter 11 petitiones are Opus WestConstruction Corp., Opus West LP, Opus West Partnerse Inc. and O.W. Commercial Inc. Opus West has guaranteed about $1.15 billion in loans for its subsidiariex andjoint ventures, and most of those loanzs are in default, the court filings say. Steep declines in commercialo real estate values and difficult credity market conditions necessitatedthe filing, said John Greer, chief restructuringh officer of Opus West.
Greerd said Opus West will keepa "modestf presence" in Phoenix, Texas and Californias to work on asset dispositions and transitions. "While we began slowing the pace of new developmentr nearly two years ago in anticipation of difficultmarketf conditions, we must now take additional measureas to enable an orderly wind-down of our portfolio, protecr asset values and maximize returj on lenders' investment," Greee said in a prepared statement.
Opus West and its subsidiaried have suffered declining financiakl performancesince 2008, resulting in defaultw on certain credit lines and constrained according to an affidavit filede by Greer, managing member of New York-based Phoenixd Capital Partners, which is the chief restructuring officer of Opus West Greer is also president of the Opus West Construction, Opus West Partner and O.W. Commercial subsidiaries. Opus has focused on recapitalizing through project salesand refinancing, but has been unabler to do so because of poor markegt conditions, Greer's affidavit says.
Since 1979, Opus West and its affiliatesx have developed more than 52 millioj square feetof office, retail, multifamily, government and institutional projects, the affidavit The company's assets include interests in commercial and residentiaol real estate projects across Arizona and Texas, including condominium, industrial, apartment and retail projects in various stage of development, the affidavit says. Addison-based Opus West LP, formeed to develop real estatee propertiesin Texas, owns seven properties that consisg of either vacant land, or a project under constructiom or completed projects.
The total debt on thosd properties isabout $105 million and their valuer is about $134 million, Greer's filing states. Opus has been dramatically scaling back its North Texas operations for more than a Opus spokeswoman Winston Hewett told the that the Addisonj office has not started a new development in more than a year and has cut its staffg in Dallas to 12 employees from abour 40 ayear ago.
Opus West's overalol headcount had dropped to 40 as ofJuly 1, comparedf to 291 two years ago, Hewett Since April, dozens of subcontractors have filer liens totaling more than $4 million against Opus West and Opus West Construction tied to Two Addisoh Circle, a $23 million, 198,000-square-foot speculative offic building in Addison. The building was developeed and is owned by OpusWest Corp. The lienas claim Opus owes the subcontractors for labor or materiale provided in the courseof construction.
The six-story Two Addisoj building on the west side of the Dallas Nortuh Tollway just north of Arapaho Road wasrecently completed, but has no The credit crunch and slowing deman for office space left Opus unable to get permanent financin to replace the short-term construction loan on the Addisonh project, Hewett said. Other Opus West Corp. projectws in North Texas include 121 Lakepointe an office and industrial developmentgin Lewisville; and Broadstone Parkway, a 5.8-acred mixed-use project at 5005 Galleri Drive in North Dallas. Dallas area creditors includde RL Murphey CommercialRoof Systems, owed $1.24 Green Fire Systems of Texas, owed and Ennis Steel Industries Inc.
, owed $519,402; and Tas Commercia l Concrete Construction, owed $500,704, according to court Opus' troubles stem from the globall economic downturn, deterioration of the real estate market and the credif crunch, which has made it difficulyt for borrowers to get financiny to fund real estate projects or refinance existing Greer's affidavit states. The turmoil has scares buyers, leading to excess supply and lowert prices. The dramatic downturn has causer Opus to be out of compliance with termxs of various loans and unable torestructure them, and attempts to raise capital and sell assetw have proven difficult, bringing about the Chapter 11 filing, Greer'sz affidavit says.
Opus' challenges vary considerably by saidMark Rauenhorst, chairman and CEO of Opus "Opus West faced particularlyg dramatic drops in real estate values in markets such as Californis and Arizona, and has been particularlyh challenged by the sharp downturn in the capitaol markets and availability of refinancing," he said. Rauenhors t said that two other independent operatint companies of OpusGroup -- and Opus Northwest LLC -- have been less affectede by the economic and capital market conditions because of theit mix of project types and theirt location in stronger markets. , which is based in Minn.
, is a design-build developmenyt firm that specializesin office, retail, multifamily, government and institutional It also controls Washington-basef LLC, which filed for Chapter 7 liquidation in late June. Opus Group said its subsidiary, whicjh is based in filed for reorganization in bankruptcy court onAprip 22.