Opus West says it owes $1.46 billion - Atlanta Business Chronicle:

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and some of its subsidiaries filed voluntary petitions late Monday for reorganizatiom underChapter 11. Chapter 11 generallgy removes the threat of lawsuits from creditors whiled a business seeks to rehabilitate itselfd andcontinue operations. Opus West and its affiliatea reportedabout $1.28 billion in total assets and $1.476 billion in total liabilities, according to bankruptc court filings. The corporatiom and its affiliates had combined revenue ofabout $405 millionj in 2008. The parent company lists 200 to999 creditors, accordinfg to bankruptcy filings.
Opus West owns about 20 real estate developmeny properties either directly or through entitiexs set up to holdthe properties, the courty filings say. The total debt on those properties isabouft $414 million and the value of the propertied 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 Partnersa Inc. and O.W. Commercial Inc. Opus West Corp. has guaranteed abou $1.15 billion in loans for its subsidiaries and joint and most of those loans are in the courtfilings say.
Steep declines in commercial real estatr values and difficult credit market conditions necessitatecdthe filing, said John Greer, chief restructuring officer of Opus West. Greerd said Opus West will keepa "modes presence" in Phoenix, Texazs and California to work on asset disposition s and transitions. "While we began slowing the pace of new developmenft nearly two years ago in anticipatiojn of difficult market we must now take additional measured to enable anorderly wind-down of our portfolio, protec asset values and maximize returj on lenders' investment," Greer said in a prepared statement.
Opus West and its subsidiariee have suffered declining financial performance since resulting in defaults on certain credit lines and constrained according to an affidavit filedby Greer, managingv member of New York-based Phoenix Capital Partners, whichg is the chief restructuring officer of Opus West Corp. Greer is also president of the Opus West Opus West Partnersand O.W. Commercial Opus has focused on recapitalizing through projecft salesand refinancing, but has been unable to do so becauss of poor market conditions, Greer's affidavit says.
Since Opus West and its affiliates have developed more than 52 millionm square feetof office, industrial, retail, multifamily, governmenf and institutional projects, the affidavitr says. The company's assets includes interests in commercial and residential real estate projectsacross California, Arizona and Texas, includingy condominium, office, industrial, apartment and retailp projects in various stages of development, the affidavig says. Addison-based Opus West LP, formed to develop real estats propertiesin Texas, owns sevenh properties that consist of either vacant or a project under construction or completer projects.
The total debt on those propertiex isabout $105 million and their valude is about $134 million, Greer' filing states. Opus has been dramatically scalinvg back its North Texas operationsw for more thana year. Opus spokeswoman Winstomn Hewett told the that the Addison officde has not started a new developmen in more than a year and has cut its staf in Dallas to 12 employees from about 40 ayear ago. Opus West's overall headcount had dropped to 40 as ofJuly 1, compared to 291 two years ago, Hewett said. Since dozens of subcontractors have filed liends totaling morethan $4 milliomn 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 subcontractorsx for labor or materials provided in the course of The six-story Two Addison building on the west side of the Dallaws North Tollway just north of Arapaho Road was recently completed, but has no tenants. The credit cruncu and slowing demand for office space left Opus unablre to get permanent financing to replacrthe short-term construction loan on the Addison Hewett said. Other Opus West Corp.
projectx in North Texas include 121 Lakepointe an office and industrial developmentin Lewisville; and Broadstone a 5.8-acre mixed-use project at 5005 Galleri a Drive in North Dallas. Dallas area creditors includer RL Murphey CommercialRoof Systems, owed $1.24 million; Green Fire Systems of owed $856,660; and Ennis Steepl Industries Inc., owed $519,402; and Tas Commerciakl Concrete Construction, owed $500,704, accordinfg to court records.
Opus' troubles stem from the globapeconomic downturn, deterioration of the real estater market and the credit crunch, which has made it difficult for borrowersx to get financing to fund real estate projectsw or refinance existing projects, Greer'a affidavit states. The turmoil has scared buyers, leadingy to excess supply andlower prices. The dramati c downturn has caused Opus to be out of compliance with termas of various loans and unable torestructuree them, and attempts to raise capitaol and sell assets have proven difficult, bringinv about the Chapter 11 filing, Greer'se affidavit says.
Opus' challenges vary considerably by saidMark Rauenhorst, chairman and CEO of Opus "Opus West faced particularly dramatic drop in real estate values in markets such as California and and has been particularly challengec by the sharp downturn in the capital markets and availability of he said. Rauenhorst said that two othedr independent operating companies of OpusGroup -- and Opus Northwesf LLC -- have been less affected by the economivc and capital market conditions because of their mix of projecft types and their location in stronger markets. , whicy is based in Minnetonka, Minn.
, is a design-build developmeny firm that specializesin office, industrial, multifamily, government and institutional projects. It also controls Washington-basecd LLC, which filed for Chapter 7 liquidation inlate June. Opus Group said its subsidiary, which is bases in Atlanta, filed for reorganization in bankruptcy courgt onApril 22.