Opus West says it owes $1.46 billion - Minneapolis / St. Paul Business Journal:

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and some of its subsidiaries filed voluntary petitions late Mondagy for reorganization underChapterf 11. Chapter 11 generallh removes the threat of lawsuits from creditorsx while a business seeks to rehabilitate itself andcontinues operations. Opus West and its affiliates reportedabourt $1.28 billion in tota assets and $1.46 billion in total liabilities, according to bankruptcy court filings. The corporation and its affiliates had combinecd revenue ofabout $405 million in 2008. The parenrt company lists 200 to 999 according tobankruptcy filings. Opus West owns about 20 real estate developmeng properties either directly or through entitiexs set up to hold the the courtfilings say.
The total debt on those propertiew isabout $414 million and the valus of the properties is aboug $403 million. In addition to Opus West the subsidiaries that have filed Chapted 11 petitions are Opus West Construction OpusWest LP, Opus West Partners Inc. and O.W. Commercial Inc. Opus West has guaranteed about $1.15 billion in loans for its subsidiariea andjoint ventures, and most of those loans are in the court filings say. Steep declines in commercial real estatre values and difficult credit market conditionsa necessitatedthe filing, said John Greer, chief restructuring officert of Opus West.
Gree said Opus West will keep a "modesty presence" in Phoenix, Texas and California to work on assetf dispositionsand transitions. "Whilee we began slowing the pace of new development nearly two years ago in anticipation of difficultmarkeyt conditions, we must now take additional measureas to enable an orderly wind-down of our protect asset values and maximiz e return on lenders' investment," Greer said in a prepared Opus West and its subsidiaries have suffered declining financial performance since 2008, resulting in defaults on certaimn credit lines and constrained according to an affidavit filed by managing member of New York-based Phoenix Capital which is the chief restructuring officetr of Opus West Corp.
Greer is also presidentf of the OpusWest Construction, Opus West Partnerxs and O.W. Commercial Opus has focused on recapitalizing through project sales and but has been unable to do so becaus e of poormarket conditions, Greer'sa affidavit says. Since 1979, Opus West and its affiliateds have developed more than 52 millio square feetof office, industrial, multifamily, government and institutional projects, the affidavit says.
The company's assets includee interests in commercial and residentiak real estate projectsacross California, Arizona and Texas, includinyg condominium, office, industrial, apartment and retail projects in various stagezs of development, the affidavit Addison-based Opus West LP, formed to develop real estat properties in Texas, owns seven properties that consist of eithefr vacant land, or a project under construction or completed projects. The total debt on those propertiesw isabout $105 million and their valud is about $134 million, Greer's filinb states.
Opus has been dramatically scaling back its Nortb Texas operations for more than a Opus spokeswoman Winston Hewett told the that the Addison office has not started a new developmeny in more than a year and has cut its staffg in Dallas to 12 employees from about 40 ayear ago. Opus West's overalo headcount had dropped to 40 as ofJuly 1, comparedf to 291 two years ago, Hewett Since April, dozens of subcontractors have filee liens totaling more than $4 million against Opus West and Opus West Construction tied to Two Addison Circle, a $23 198,000-square-foot speculative office buildinh in Addison. The building was developed and is ownecd by OpusWest Corp.
The liens claim Opus owes the subcontractors for labort or materials provided in the coursweof construction. The six-storg Two Addison building on the west side of the Dallads North Tollway just north of Arapahi Road was recently but hasno tenants. The credit crunc h and slowing demand for office space left Opus unable to get permanengt financing to replacethe short-ter construction loan on the Addison project, Hewett Other Opus West Corp. projects in North Texas include 121Lakepointe Crossing, an office and industrial development in Lewisville; and Broadstonee Parkway, a 5.8-acre mixed-usse project at 5005 Galleria Drive in North Dallas.
Dallasd area creditors include RL Murphey CommercialkRoof Systems, owed $1.24 million; Green Fire Systemd of Texas, owed $856,660; and Ennis Steel Industries owed $519,402; and Tas Commercial Concret Construction, owed $500,704, according to cour t records. Opus' troubles stem from the global economic downturn, deterioration of the real estatw market and the credit crunch, whic has made it difficult for borrowers to get financint to fund real estatre projects or refinance existing projects, Greer's affidavi states. The turmoil has scared buyers, leading to excese supply and lower prices.
The dramatixc downturn has caused Opus to be out of compliancer with terms of various loans and unablwe torestructure them, and attempts to raiswe capital and sell assets have provehn difficult, bringing about the Chapter 11 filing, Greer's affidavigt says. Opus' challenges vary considerably by saidMark Rauenhorst, chairman and CEO of Opus "Opus West faced particularly dramatic drops in real estate valueas in markets such as California and and has been particularly challengedx by the sharp downturnh in the capital markets and availability of he said.
Rauenhorst said that two other independent operating companies of OpusGroupp -- and Opus Northwest LLC -- have been less affectesd by the economic and capital market conditions because of their mix of project types and their locationn in stronger markets. , which is based in Minnetonka, is a design-build development firm that specializezsin office, industrial, retail, multifamily, government and institutionao projects. It also controls Washington-based LLC, whichj filed for Chapter 7 liquidation in late Opus Group saidits subsidiary, whic is based in Atlanta, filed for reorganization in bankruptcy courf on April 22.