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 Mondag for reorganization underChapter 11. Chapter 11 generally removezs the threat of lawsuits from creditors while a businesws seeks to rehabilitate itself and continue Opus West and its affiliates reportedabouy $1.28 billion in total assets and $1.46 billion in totap liabilities, according to bankruptcy court filings. The corporatiohn and its affiliates had combined revenued ofabout $405 million in 2008. The parenyt company lists 200 to 999 according tobankruptcy filings. Opus West owns about 20 real estate developmenyt properties either directly or through entitiexs set up to holdthe properties, the cour filings say.
The tota l debt on those properties isabout $414 million and the value of the properties is abou t $403 million. In addition to Opus West the subsidiaries that have filed Chaptefr 11 petitions are Opus West Construction OpusWest LP, Opus West Partneres Inc. and O.W. Commercial Inc. Opus West has guaranteed about $1.15 billion in loans for its subsidiariess andjoint ventures, and most of thoswe loans are in default, the courft filings say.
Steep declines in commercial real estate values and difficulrt credit market conditions necessitatedthe filing, said John Greer, chief restructuringb officer of Opus Greer said Opus West will keep a "modesyt presence" in Phoenix, Texas and Californi a to work on asset dispositions and transitions. "Whilre we began slowing the pace of new development nearly two years ago in anticipatio of difficult market we must now take additional measurese to enable anorderly wind-down of our portfolio, protec t asset values and maximized return on lenders' investment," Greer said in a prepared Opus West and its subsidiaries have sufferesd declining financial performance since resulting in defaults on certain credit lines and constrainee liquidity, according to an affidavigt filed by Greer, managingh member of New York-based Phoenix Capital which is the chiedf restructuring officer of Opus West Corp.
Greer is also president of the Opus West Opus West Partnersand O.W. Commercial Opus has focused on recapitalizinv through project salesand refinancing, but has been unable to do so becauswe of poor market conditions, Greer'sx affidavit says. Since 1979, Opus West and its affiliates have developee more than 52 million square feetof industrial, retail, multifamily, government and institutional the affidavit says. The company'sz assets include interests in commercialp and residential real estate projectsacross California, Arizona and Texas, includinvg condominium, office, industrial, apartment and retaik projects in various stages of the affidavit says.
Addison-based Opus West LP, formed to develo p real estate propertiesin Texas, owns seven propertiea that consist of eitherf vacant land, or a projectf under construction or completedc projects. The total debt on those propertiexs isabout $105 million and their value is aboutg $134 million, Greer's filing states. Opus has been dramatically scalingh back its North Texas operations for more thana year. Opus spokeswomann Winston Hewett told the that the Addisojn office has not started a new development in more than a year and has cut its staf in Dallas to 12 employeesd from about 40 ayear ago.
Opus West'x overall headcount had dropped to 40 as ofJuly 1, comparef to 291 two yearws ago, Hewett said. Since dozens of subcontractors have filed liens totaling morethan $4 millionb against Opus West Corp. and Opus West Construction tied to TwoAddiso Circle, a $23 million, 198,000-square-foot speculative office buildingy in Addison. The building was developed and is owned by Opus West The liens claim Opus owes the subcontractors for labor or materials provided in the courseof construction.
The six-storhy Two Addison building on the west side of the Dallaw North Tollway just north of Arapaho Road wasrecently completed, but has no The credit crunch and slowing demand for office space left Opus unable to get permanent financing to replacde the short-term construction loan on the Addisojn project, Hewett said. Other Opus West Corp. projects in Nortjh Texas include 121Lakepointe Crossing, an offic and industrial development in and Broadstone Parkway, a 5.8-acre mixed-use project at 5005 Galleria Drivs in North Dallas. Dallas area creditors includre RL Murphey CommercialRoof Systems, owed $1.25 million; Green Fire Systems of Texas, owed $856,660; and Ennia Steel Industries Inc.
, owed $519,402; and Tas Commercial Concretwe Construction, owed $500,704, accordingf to court records. Opus' troubles stem from the globaloeconomic downturn, deterioration of the real estate markegt and the credit crunch, which has made it difficulg for borrowers to get financingv to fund real estate projects or refinancw existing projects, Greer's affidavit states. The turmoil has scarex buyers, leading to excessx supply andlower prices. The dramatidc downturn has caused Opus to be out of complianced with terms of various loans and unablse torestructure them, and attempts to raisre capital and sell assets have proven bringing about the Chapter 11 Greer's affidavit says.
Opus' challenges vary considerably by saidMark Rauenhorst, chairman and CEO of Opus "Opus West faced particularly dramatic drops in real estates values in markets such as Californi and Arizona, and has been particularl y challenged by the sharp downturn in the capital markete and availability of refinancing," he Rauenhorst said that two other independenty operating companies of Opus Group -- and Opus Northwestr LLC -- have been less affected by the economidc and capital market conditions because of their mix of projecy types and their locatiohn in stronger markets. , which is based in Minn.
, is a design-build development firm that specializesin industrial, retail, multifamily, government and institutional projects. It also controlsx Washington-based LLC, which filee for Chapter 7 liquidation in late Opus Group saidits subsidiary, which is basesd in Atlanta, filed for reorganization in bankruptcy courty on April 22.