Kimball Hill Homes Will Close Its Doors
December 3, 2008
Kimball Hill Homes, a private builder founded in 1969, has become the latest casualty of the housing and credit crisis: the firm will close its doors after finishing the homes currently under construction.
“We deeply regret the necessity of today’s decision, but given the current housing and financial market conditions we are simply unable to conduct normal operations while the Company continues its sale efforts,” said Ken Love, Chief Executive Officer. “We believe it is appropriate to begin the wind-down process now to ensure the smoothest transition possible for our employees, our home buyers, the communities we serve, as well as our creditors.”
The Company said that it continues to have access to more than $35 million from its debtor-in-possession (DIP) financing facility, which along with home sale proceeds will provide more than ample liquidity to fund payments to contractors and trade partners and meet employee obligations throughout the sale and wind-down process.
“We have maintained very strong relationships with our trade partners and suppliers during the bankruptcy and have appreciated their ongoing support, which we anticipate will continue as we complete homes currently under construction,” Mr. Love said. “The quick resolution of our trade partners’ pre-petition claims following the bankruptcy filing was a significant achievement and we will continue to pay our suppliers as work is completed throughout the process.”
“Over the last seven months, our employees have worked tirelessly to sustain our business in an unprecedented economic downturn. I want to thank them for their dedication, loyalty and commitment to Kimball Hill Homes,” concluded Mr. Love. “I am pleased that the Company will provide both severance and outplacement assistance to impacted employees, in accordance with the Company’s standard practices, throughout the sale and wind down period.”
The Company has asked for a hearing on January 13, 2009 to approve the Disclosure Statement accompanying the Plan.
The news indicates just how difficult conditions have become for the nation’s home builders. Kimball Hill, a BUILDER 100 builder which closed 3,246 homes as recently as 2007, filed for Chapter 11 bankruptcy protection earlier this year. But restructuring proved impossible given the current state of the economy and housing market, and now the company plans to either sell the business or its assets.
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