Another Day, Another Bankruptcy, as Opus South Files for Ch. 11

Just days after one of the largest commercial real estate bankruptcies ever–that of retail giant General Growth Properties last week–another high profile firm has filed for Chapter 11. Opus South Corp., one of the divisions of Opus Corp., has also been forced to say Uncle in bankruptcy court, citing the slumping Florida condo market as the main culprit.Opus South’s chief restructuring officer Anne Marie Solberg said that, though the firm had begun pulling back the pace of new condo development almost two years ago as the credit crunch and industry downturn began to loom, the severe nosedive taken by the larger economy has forced Opus South to “take additional measures to enable an orderly wind down of our portfolio, protect asset values and maximize returns on lenders’ investments.” With the filing, the Atlanta-based firm also plans to eventually exit from that market, as well as Tampa, according to a report in the Tampa Bay Business Journal. Opus South was primarily a retail developer until the condo boom hit the Southeast several years ago. It’s current condo projects and other development have left the company with 12 loans totaling $324 million that are coming due. Because very few of the delivering units have sold, the firm was unable to make good to its creditors. Opus South operates independently from Minnesota-based Opus Corp., which will not be affected by the filing. The Opus South bankruptcy, while certainly significant, is dwarfed by last week’s $27 billion Chapter 11 filing of behemoth mall owner General Growth Properties. But both companies have similar stories; taking on way too much debt in anticipation of a continued property bubble that wound up bursting. As the economy continues to put a drag on the industry, and financing options remains scarce, it’s a good bet that Opus South and General Growth will have some company in bankruptcy court in the coming months–especially considering the massive debt loads that many other firms took to make aggressive plays in the industry’s heady days, which are now long gone.