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

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and some of its subsidiaries filed voluntary petitionsz late Monday for reorganization underrChapter 11. Chapter 11 generally removeas the threat of lawsuits from creditorsd while a business seeks to rehabilitate itself and continue operations. Opus West and its affiliates reportedxabout $1.28 billion in total assets and $1.46 billion in tota liabilities, according to bankruptchy court filings. The corporation and its affiliates had combinedx revenue ofabout $405 million in 2008. The pareng company lists 200 to999 creditors, accordinv to bankruptcy filings. Opus West Corp.
owns about 20 real estate development propertiea either directly or through entities set up to hold the the courtfilings say. The totalk debt on those properties isabout $414 million and the valude of the properties is about $403 million. In addition to Opus West Corp., the subsidiaries that have filedx Chapter 11 petitions are Opus WestConstructiobn Corp., Opus West LP, Opus West Partnerw Inc. and O.W. Commercial Inc. Opus West Corp. has guaranteed about $1.15 billion in loanzs for its subsidiaries andjoint ventures, and most of those loanzs are in default, the court filings say.
Steep declines in commercial real estatde values and difficult credit market conditions necessitated the saidJohn Greer, chief restructurinyg officer of Opus West. Greere said Opus West will keepa "modesrt presence" in Phoenix, Texad and California to work on assety dispositions and transitions. "While we began slowingg the pace of new development nearlyg two years ago in anticipation of difficult market we must now take additional measures to enabls anorderly wind-down of our portfolio, protectf asset values and maximize return on lenders' Greer said in a prepared statement.
Opus West and its subsidiariesw have suffered declining financial performancesincre 2008, resulting in defaults on certaih credit lines and constrained according to an affidavit filed by Greer, managing membed of New York-based Phoeni Capital Partners, which is the chief restructuring officedr of Opus West Corp. Greer is also president of the Opus West Opus West Partnersand O.W. Commercial subsidiaries. Opus has focused on recapitalizing through project salesand refinancing, but has been unabls to do so because of poor market conditions, Greer's affidavi t says.
Since 1979, Opus West and its affiliatezs have developed more than 52 million square feetof office, retail, multifamily, government and institutionao projects, the affidavit says. The company's assetas include interests in commercial and residential real estate projects across Arizonaand Texas, including condominium, industrial, apartment and retail projects in various stageds of development, the affidavit says. Addison-based Opus West LP, formed to developo real estate propertiesin Texas, owns sevenh properties that consist of eithed vacant land, or a project under construction or completef projects.
The total debt on those propertiesw isabout $105 million and their value is about $134 million, Greer'w filing states. Opus has been dramatically scaling back its Nort Texas operations for more thana year. Opus spokeswomann Winston Hewett told the that the Addison offices has not started a new development in more than a year and has cut its staffd in Dallas to 12 employeex from about 40 ayear ago. Opus West'xs overall headcount had dropped to 40 as ofJuly 1, comparedc to 291 two years ago, Hewett said.
Since April, dozens of subcontractorzs have filed liens totaling morethan $4 million against Opus West and Opus West Construction tied to Two Addisonb Circle, a $23 million, 198,000-square-foot speculative office building in Addison. The building was developed and is owned by Opus West The liens claim Opus owes the subcontractors for labod or materials provided in the coursewof construction. The six-story Two Addison buildintg on the west side of the Dallaas North Tollway just north of Arapaho Road was recently completed, but has no tenants.
The credir crunch and slowing demandx for office space left Opus unablre to get permanent financing to replacwthe short-term construction loan on the Addisonn project, Hewett said. Other Opus West Corp. project in North Texas includse 121Lakepointe Crossing, an officde and industrial development in Lewisville; and Broadstonse Parkway, a 5.8-acre mixed-use project at 5005 Galleri Drive in North Dallas. Dallas area creditora include RL Murphey CommercialRoof Systems, owed $1.24 Green Fire Systems of Texas, owed and Ennis Steel Industriess Inc., owed $519,402; and Tas Commercial Concrete Construction, owed $500,704, accordinf to court records.
Opus' troubled stem from the global economic downturn, deterioration of the real estates market and the credit crunch, which has made it difficultg for borrowers to get financing to fund real estates projects or refinance existing projects, Greer's affidavit The turmoil has scared leading to excess supply and lower prices. The dramatif downturn has caused Opus to be out of compliance with terma of various loans and unabld torestructure them, and attempts to raise capital and sell assetw have proven difficult, bringing abourt the Chapter 11 filing, Greer's affidavit Opus' challenges vary considerably by region, said Mark chairman and CEO of Opus Corp.
"Opus West faced particularly dramatic drops in real estate valuea in markets such as Californiaand Arizona, and has been particularl challenged by the sharp downturn in the capitapl markets and availability of refinancing," he Rauenhorst said that two othe independent operating companies of Opus Groul -- and Opus Northwest LLC -- have been less affected by the economic and capital marketg conditions because of their mix of project types and their location in stronger markets. , which is based in Minnetonka, Minn., is a design-build developmengt firm that specializesin office, retail, multifamily, government and institutional projects.
It also controls Washington-based LLC, whichy filed for Chapter 7 liquidation in late Opus Group saidits subsidiary, which is bases in Atlanta, filed for reorganization in bankruptcuy court on April 22.