Long Beach : IDM Real Estate Firm Files for Chapter 11 Protection

The city’s largest real estate development company, facing mounting debt caused in part by the stagnating economy, last week sought court protection from its creditors.

IDM Corp. filed for bankruptcy under Chapter 11 of the Federal Bankruptcy Act in a Santa Barbara federal courthouse. It also submitted a plan that would allow it to continue operating and reorganize before paying off the estimated $402 million owed to creditors and investors.

IDM was formed 23 years ago by local real estate broker Michael Choppin, who bought and resold small apartment buildings. Under his leadership, IDM attracted 15,000 investors and eventually became the city’s largest developer and the builder of some of its most eye-catching properties, including the World Trade Center. It has built about 30 projects throughout Los Angeles and Ventura counties.

IDM spokesman Jim McMillan said that the company was caught by a shrinking economy which, among other things, caused office vacancy rates to soar as tenants went out of business or left in search of cheaper rents. IDM, like many other developers, was forced to lower rents to keep tenants, but the result was it did not have enough money to pay its mortgages or its investors. The corporation was also hurt by plummeting values caused when the real estate market was flooded with property formerly held by defunct savings and loan companies, McMillan said.

McMillan stressed that company officials decided to file Chapter 11 to stabilize the corporation and its many partnerships. He said IDM will continue business as usual. “We want to get on with this as quickly as we can, get it behind us and move on with our lives.”