Insolvency is a prospect that many individuals and companies face every day in Maryland and across the country. The basic math is simple. If debts exceed assets, they often exceed the ability of individuals or businesses to repay those debts. Fortunately, both individuals and businesses have a variety of bankruptcy options available to them.
An example of a business bankruptcy in its last stages is that of real estate giant Opus Corp. The dissolution began in earnest in 2009 when the first of three of the Minneapolis-based corporation’s subsidiaries filed for bankruptcy, two under Chapter 11 and one under Chapter 7.
The Phoenix subsidiary, Opus West, filed under Chapter 11 after creditors alleged that the Minneapolis parent corporation had siphoned funds that sent Opus West into debt. Opus South in Atlanta filed for Chapter 11 in 2009 and was subsequently shut down when assets were liquidated and parceled out to creditors.
The Washington, D.C., subsidiary, Opus East, filed for Chapter 7 and listed assets of $50 million to $100 million but liabilities of $100 million to $500 million. Court records indicate that some 2,000 creditors were left holding $600 million or so in debt. In addition, a Maryland development that led Opus to sue the federal government fell apart. Five years later, creditors are arguing over what little is left in assets.
As the Opus Corp. saga shows, commercial bankruptcies are complex and involve identifying and valuing all assets, determining cash flow and finding ways to liquidate debts and assets. Those dealing with financial problems with their business or corporation should understand their options, especially when it comes to reducing their debts.
Filing for bankruptcy can be a major decision to make. The process could be lengthy and complex. It is best that guidance of a College Park Maryland small business lawyer is sought so they understand all the steps and what to expect down the line.
Source: The Columbia Heart Beat, “THE TROUBLE WITH OPUS: Bankruptcies, lawsuits, fraud charges mar history of student apartment developer,” April 21, 2014.