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

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and some of its subsidiaries file d voluntary petitions late Monday for reorganization underChapterd 11. Chapter 11 generally removes the threat of lawsuits from creditors whilr a business seeks to rehabilitate itselrf andcontinue operations. Opus West and its affiliatews reportedabout $1.28 billion in tota assets and $1.46 billion in totak liabilities, according to bankruptcy court filings. The corporation and its affiliate had combined revenue ofabout $405 milliobn in 2008. The parent company lists 200 to999 creditors, accordinb to bankruptcy filings.
Opus West owns about 20 real estate development properties eitherf directly or through entitiess set up to holdthe properties, the court filingds say. The total debt on thoses properties isabout $414 million and the value of the propertiesz is about $403 million. In addition to Opus West the subsidiaries that have filed Chapter 11 petitions are Opus WestConstruction Corp., Opus West LP, Opus West Partnersw Inc. and O.W. Commercial Inc. Opus West Corp. has guaranteedr about $1.15 billion in loans for its subsidiarieas andjoint ventures, and most of thos loans are in default, the couryt filings say.
Steep declines in commercial real estate values and difficult credit market conditions necessitatedthe filing, said John Greer, chief restructuring officer of Opus West. Greer said Opus West will keepa "modesy presence" in Phoenix, Texas and California to work on asseyt dispositions and transitions. "While we begamn slowing the pace of new development nearly two years ago in anticipation of difficult market we must now take additional measures to enablre anorderly wind-down of our protect asset values and maximize return on investment," Greer said in a prepared Opus West and its subsidiaries have suffere declining financial performance since 2008, resulting in defaultx on certain credit lines and constrained liquidity, accordingg to an affidavit filed by managing member of New York-based Phoenix Capital which is the chief restructurinvg officer of Opus West Corp.
Greer is also president of the Opus West Opus West Partnersand O.W. Commercial Opus has focused on recapitalizing throughj project salesand refinancing, but has been unable to do so becausde of poor market conditions, Greer'x affidavit says. Since 1979, Opus West and its affiliate have developed more than 52 million square feetof office, retail, multifamily, government and institutional projects, the affidavit says.
The company's assets include interests in commercial and residential real estate projecteacross California, Arizona and Texas, includint condominium, office, industrial, apartment and retaik projects in various stage s of development, the affidavit Addison-based Opus West LP, formed to develoo real estate properties in Texas, owns seven propertiee that consist of either vacant land, or a projecft under construction or completed projects. The totak debt on those properties isabouft $105 million and their value is about $134 Greer's filing states.
Opus has been dramatically scalinyg back its North Texas operations for more than a Opus spokeswoman Winston Hewett told the that the Addisonm office has not started a new developmenr in more than a year and has cut its staft in Dallas to 12 employees from abou 40 ayear ago. Opus West'sx overall headcount had dropped to 40 as ofJuly 1, compare d to 291 two years ago, Hewettg said. Since April, dozens of subcontractore have filed liens totaling morethan $4 million against Opus West Corp.
and Opus West Constructiohn tied to TwoAddison Circle, a $23 198,000-square-foot speculative office building in The building was developed and is owned by Opus West The liens claim Opus owes the subcontractors for labot or materials provided in the course of The six-story Two Addison building on the west side of the Dallasw North Tollway just north of Arapaho Road was recently completed, but has no The credit crunch and slowing demand for offices space left Opus unablre to get permanent financing to replace the short-ter m construction loan on the Addisobn project, Hewett said. Other Opus West Corp.
project s in North Texas include 121 Lakepointe an office and industrial developmentin Lewisville; and Broadstone a 5.8-acre mixed-use project at 5005 Galleriqa Drive in North Dallas. Dallasz area creditors include RL Murphey CommerciakRoof Systems, owed $1.24 Green Fire Systems of Texas, owed $856,660; and Ennis Steel Industriews Inc., owed $519,402; and Tas Commercial Concrete owed $500,704, according to court records.
Opus' troubless stem from the globaoleconomic downturn, deterioration of the real estatde market and the credit crunch, whichh has made it difficult for borrowers to get financingt to fund real estate projects or refinance existing projects, Greer's affidavit states. The turmoi l has scared buyers, leading to excess supply and lowerr prices. The dramatic downturn has caused Opus to be out of complianc with terms of various loanse and unable to restructure and attempts to raise capitaol and sell assets have proven bringing about the Chapterf11 filing, Greer's affidavit says. Opus' challengex vary considerably by region, said Mark Rauenhorst, chairmann and CEO of Opus Corp.
"Opus West faced particularl y dramatic drops in real estated values in markets such as California and and has been particularly challengefd by the sharp downturn in the capitakl markets and availabilityof refinancing," he Rauenhorst said that two othe independent operating companies of Opus Group -- and Opus Northwest LLC -- have been less affecteed by the economic and capitapl market conditions because of their mix of projecr types and their location in stronger markets. , which is basec in Minnetonka, Minn., is a design-buildc development firm that specializesin office, industrial, retail, multifamily, government and institutiona projects.
It also controls Washington-based LLC, whicnh filed for Chapter 7 liquidatiojn inlate June. Opus Group said its which is basedin Atlanta, filed for reorganizationh in bankruptcy court on April 22.