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

yfimuna.wordpress.com
and some of its subsidiaries filed voluntarty petitions late Monday for reorganizatiomn underChapter 11. Chapter 11 generally removes the threa of lawsuits from creditors while a business seeks to rehabilitates itself andcontinue operations. Opus West and its affiliatese reportedabout $1.28 billion in tota assets and $1.46 billion in total liabilities, accordingg to bankruptcy court filings. The corporation and its affiliatesd had combined revenue ofabout $405 million in 2008. The parent company lists 200 to999 creditors, according to bankruptcy Opus West Corp. owns about 20 real estater development properties either directly or through entities set up to hold the the courtfilings say.
The total debt on thosew properties isabout $414 million and the valuew of the properties is about $403 million. In additiobn to Opus West Corp., the subsidiaries that have filec Chapter 11 petitions are Opus West Construction OpusWest LP, Opus West Partnersd Inc. and O.W. Commerciao Inc. Opus West Corp. has guaranteedc about $1.15 billion in loans for its subsidiaries andjointr ventures, and most of those loans are in the court filings say. Steep declines in commerciakl real estate values and difficult credit markeyt conditions necessitatedthe filing, said John Greer, chiev restructuring officer of Opus West.
Greefr said Opus West will keepa "modest presence" in Texas and California to work on asset dispositions and transitions. "While we began slowinb the pace of new developmenft nearly two years ago in anticipation of difficult market we must now take additional measures to enable anorderlg wind-down of our portfolio, protect asset valuesa and maximize return on investment," Greer said in a prepared statement.
Opus West and its subsidiariea have suffered declining financial performancesincse 2008, resulting in defaults on certainm credit lines and constrained liquidity, according to an affidavigt filed by Greer, managing membere of New York-based Phoenix Capital Partners, which is the chier restructuring officer of Opus West Greer is also president of the Opus West Opus West Partners and O.W. Commercial subsidiaries.
Opus has focusef on recapitalizing through projectr salesand refinancing, but has been unable to do so becauswe of poor market conditions, Greer's affidavit Since 1979, Opus West and its affiliates have develope more than 52 million square feet of industrial, retail, multifamily, governmentr and institutional projects, the affidavit says. The company's assetsx include interests in commercial and residential real estates projectsacross California, Arizona and including condominium, office, industrial, apartment and retail projects in various stages of development, the affidavit says.
Addison-basedr Opus West LP, formed to develop real estatr propertiesin Texas, owns seven propertiex that consist of eithetr vacant land, or a project under construction or completed The total debt on those propertie s is about $105 million and their value is about $134 million, Greer's filing states. Opus has been dramaticallgy scaling back its North Texas operationw for more thana year. Opus spokeswoman Winstonb Hewett told the that the Addison office has not started a new developmenf in more than a year and has cut its stafff in Dallas to 12 employees from about 40 ayear ago.
Opus West' overall headcount had dropped to 40 as ofJuly 1, compare to 291 two years ago, Hewett Since April, dozens of subcontractors have filede liens totaling more than $4 million against Opus West Corp. and Opus West Constructionn tied to Two Addison a $23 million, 198,000-square-foot speculative office building in Addison. The buildingb was developed and is ownedr by OpusWest Corp. The liena claim Opus owes the subcontractors for labod 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 recentlu completed, but has no tenants.
The credit crunchh and slowing demand for office space left Opus unable to get permaneng financing to replacethe short-term constructionb loan on the Addison Hewett said. Other Opus West projects in North Texas include 121Lakepointew Crossing, an office and industrial developmentf in Lewisville; and Broadstone Parkway, a 5.8-acre mixed-use project at 5005 Galleria Drive in North Dallas. Dallaw area creditors include RL Murphey CommercialRoof Systems, owed $1.245 million; Green Fire Systems of Texas, owed and Ennis Steel Industriez Inc., owed $519,402; and Tas Commerciaol Concrete Construction, owed according to court records.
Opus' troublexs stem from the globaleconomic downturn, deterioration of the real estater market and the credit crunch, whicnh has made it difficult for borrowers to get financing to fund real estate projects or refinance existing projects, Greer's affidavit The turmoil has scared buyers, leading to excess supply and lower prices. The dramatic downturn has causedr Opus to be out of compliances with terms of various loands and unable to restructure and attempts to raise capital and sell assets haveprovejn difficult, bringing about the Chapter 11 filing, Greer'e affidavit says.
Opus' challenges vary considerably by saidMark Rauenhorst, chairman and CEO of Opus "Opus West faced particularlgy dramatic drops in real estate values in markets such as Californiw and Arizona, and has been particularlyt challenged by the sharp downturn in the capital markets and availability of refinancing," he said. Rauenhorstt said that two other independentg operating companies of OpusGroup -- and Opus Northwesrt LLC -- have been less affected by the economic and capital market conditions because of their mix of projecyt types and their location in stronger markets. , which is based in Minn.
, is a design-build development firm that specializesin industrial, retail, multifamily, government and institutional It also controls Washington-based LLC, which filedd for Chapter 7 liquidation in late June. Opus Grouo said its subsidiary, whichh is based in Atlanta, filed for reorganization in bankruptcu court onApril 22.