Bankrupt Opus selling two sites in VC
A Phoenix-based real estate developer facing foreclosure on a project in Camarillo has filed for bankruptcy protection while it completes ongoing financial restructuring that includes unloading some tri-county assets.
As part of the bankruptcy proceedings, Opus West Corp. will auction off two Ventura County business parks: Camarillo Ranch Business Park and Westlake North Land in Westlake Village.
“The assets are going up for sale on August 23,” said Opus spokeswoman Winston Hewett. “This has all been approved by the bankruptcy judge.”
Opus West Corp. and some of its subsidiaries filed voluntary petitions July 6 for reorganization under Chapter 11, which removes the threat of lawsuits from creditors.
One creditor looking to collect is Bank of America, which loaned Opus $31 million for the construction and development of Camarillo Ranch Business Park in August 2007.
In a July 6 suit filed in Ventura County Superior Court, Bank of America said Opus defaulted on the loan and now owes more than $25 million. The bank suspected Opus West was close to bankruptcy, according to the complaint.
Bank of America “may be unable to recover any money damages from [Opus], as they may already be insolvent or nearing insolvency,” the suit said.
Bank of America representatives did not respond to multiple messages left by the Business Times.
In the bankruptcy filings, Opus West and its affiliates reported about $1.3 billion in total assets and $1.5 billion in total liabilities. The corporation and its affiliates had a combined revenue of about $405 million in 2008. The parent company lists 200 to 999 creditors, according to bankruptcy filings.
Opus West, which also worked with Bank of America to bring the Creekside Executive Center to Camarillo in September 2008, owns about 20 real estate development properties either directly or through entities set up to hold the properties, said court bankruptcy filings. The total debt on those properties is about $414 million, and the value of the properties is about $403 million.
Steep declines in commercial real estate values and difficult credit market conditions necessitated the filing, said John Greer, chief restructuring officer of Opus West.
Greer said the company will keep a modest presence in the Western region to work on asset dispositions and transitions.
“While we began slowing the pace of new development nearly two years ago in anticipation of difficult market conditions, we must now take additional measures to enable an orderly wind-down of our portfolio, protect asset values and maximize return on lenders’ investments,” Greer said in a release.
Opus’ troubles stem from the economic downturn, deterioration of the real estate market and the credit crunch, which has made it difficult for borrowers to get financing to fund real estate projects or refinance existing projects.
Mark Rauenhorst, chairman and chief executive officer of parent company Opus Corp., said that while the challenges in the industry are as difficult as the company has experienced in its 56 years, conditions vary considerably by region.
“Opus West faced particularly dramatic drops in real estate values in markets such as California and Arizona, and has been particularly challenged by the sharp downturn in the capital markets and availability of refinancing,” Rauenhorst said in a release.
Opus West CEO and president Thomas Roberts resigned in May. It is not clear if Roberts left voluntarily or was asked to step down by executives at parent company Opus Corp.
In addition to Opus West, the subsidiaries that have filed Chapter 11 petitions are Opus West Construction Corp., Opus West LP, Opus West Partners Inc. and O.W. Commercial Inc.
Washington, D.C.-based Opus East filed for Chapter 7 liquidation in late June, and Atlanta-based Opus South filed for reorganization in bankruptcy court on April 22.
Opus North and Opus Northwest have been less affected by the economic and capital market conditions because of their project types and their location in stronger markets, Rauenhorst said.