Opus South filed Chapter 11

The move to liquidate and restructure through the courts was a result of severe declines in property values and continuing market instability.

"Declining real estate values and tight credit markets continue to impede the refinancing of assets and restructuring of lending agreements," says Opus Corp. CEO Mark Rauenhorst, in a statement. "We are taking the actions announced today to liquidate Opus East's portfolio and allow for the restructuring of Opus West's operations. We regret that this action has proven to be necessary despite the efforts of so many. A court-supervised process and transfer of distressed assets will assist Opus in reorganizing and focus on the future."

Opus East, located in Washington, DC, will work under the guidance of executive vice president Marshall Burton to liquidate its portfolio. The company's holdings are mostly in office, industrial and mixed-use projects throughout the mid-Atlantic area.

"The financial condition of Opus East has been acutely compromised by the lack of progress payments from the General Services Administration on more than $35 million in tenant improvements and base building enhancements from the NOAA project," Burton says.

While no exact date has been set for Phoenix-based Opus West to file Chapter 11, company executives expect it to take place in early July. The company has hired a legal counsel to look into restructuring and has appointed John Greer, chief restructuring officer. Less than a month ago, a spokeswoman for Opus West denied rumors of an impending court filing, despite having just hired a legal counsel.

As of now the company will hold only a small presence in California and Texas; and focus only on asset sales. "We continue to take steps to resize the business, reduce expenses and cash consumption and deleverage our portfolio," Greer says.

Rauenhorst says that both Opus North Corp. and Opus Northwest LLC are fairing better than the other three branches because of the variety of projects with strong balance sheets in healthier markets. Although in the middle of June, Opus North announced plans to shutter its Columbus office after being present in the market for 15 years.

Instant Insights /

Opus East To Liquidate, West To Restructure

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