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Lander
Dud?


Joined: 06 Mar 2007
Posts: 1

Kimball Hill Files For Chapter 11
PostPosted: Thu Apr 24, 2008 7:03 pm Reply with quoteBack to top

Chicago Tribune:

Rolling Meadows-based homebuilder Kimball Hill Homes, citing the "challenges faced by the homebuilding industry" in the housing sector's meltdown, said it filed for Chapter 11 bankruptcy protection but will maintain normal operations while it restructures.

http://www.chicagotribune.com/.....5518.story
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BuilderGirl
Flash in the pan


Joined: 07 Apr 2008
Posts: 52

Re: Kimball Hill Files For Chapter 11
PostPosted: Fri Apr 25, 2008 11:26 am Reply with quoteBack to top

I worked for them in Dallas a 5 of years ago, this is a shame.

They treated their sale people, maybe they will leave Dallas with this.

One more less to compete with.
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Pooge
Flash in the pan


Joined: 28 Feb 2008
Posts: 90

Re: Kimball Hill Files For Chapter 11
PostPosted: Fri Apr 25, 2008 2:05 pm Reply with quoteBack to top

I would not count them out yet. They are going into the bankruptcy without having to borrow money to pay day to day expenses like a lot of the other companies. They build a good quality product so people may stay loyal to them and help them through. This will be an interesting one to watch.
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Aaron
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Joined: 24 Jan 2007
Posts: 824
Location: Atlanta, GA

Re: Kimball Hill Files For Chapter 11
PostPosted: Fri Apr 25, 2008 5:27 pm Reply with quoteBack to top

I don't doubt K-H will re-emerge from bankruptcy, but I have to say that having $60M in the bank going into Chapter 11 doesn't impress me. It just means they pulled the plug earlier. That certainly speaks to the reality-based nature of management, but it doesn't suggest to me they're in a dramatically different fundamental condition than other builders.
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Pooge
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Joined: 28 Feb 2008
Posts: 90

Re: Kimball Hill Files For Chapter 11
PostPosted: Fri Apr 25, 2008 6:24 pm Reply with quoteBack to top

From comments going out today, they are looking for a buyer or at least someone to make a major investment in them.
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Aristotle
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Joined: 05 Dec 2007
Posts: 594
Location: On a sand dune, sipping a cold soda

Re: Kimball Hill Files For Chapter 11
PostPosted: Fri Apr 25, 2008 10:57 pm Reply with quoteBack to top

[quote="Aaron"]I don't doubt K-H will re-emerge from bankruptcy, but I have to say that having $60M in the bank going into Chapter 11 doesn't impress me. It just means they pulled the plug earlier. That certainly speaks to the reality-based nature of management, but it doesn't suggest to me they're in a dramatically different fundamental condition than other builders.[/quote]

Yes, going into a Chapter 11 with $60M in cash is exceptional. I suspect that Kimball Hill hopes to use the Chapter 11 to avoid having to perform/pay on contracts where performance and payment are not yet due, e.g. duty to make a future capital contribution to a joint venture.

Usually, it's a good sign when a Debtor in Possession lender is lined up, prior to foreclosure, to provide operating funds going forward. For example, Engle is building new homes with DIP financing. So, if Kimball Hill is not going to ask the Bankruptcy Court for permission to take DIP financing, and continue building, then I would be scratching their head as to what they are planning on doing.

Clearly, under a Chapter 11, Kimball Hill can sell off its standing inventory of homes to consumer buyers, assuming they can find any. It's likely that Kimball Hill will get the bankruptcy court to sign an order saying that sales of standing inventory homes are being made in the ordinary course of business, and that there is no need for the bankruptcy court to approve each residential sale one by one. The title insurance companies will insist on that sort of order before insuring any post-bankruptcy filing sales.

I am going to assume there is no White Knight who will ride in and offer to buy all of Kimball Hill's land prior to Kimball Hill filing its proposed Chapter 11 Plan of Reorganization.

As a result, Kimball Hill employees, and tract sales agent working for brokers contracted to run K-H's sales offices, will just have to "stay turned" and see what the proposed Plan of Reorganization says about future plans.

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Aristotle

As Yogi Berra said "It's like deja vu all over again."
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GC
Dud?


Joined: 03 Apr 2008
Posts: 8

Re: Kimball Hill Files For Chapter 11
PostPosted: Mon Apr 28, 2008 2:43 pm Reply with quoteBack to top

Aristotle wrote:
Aaron wrote:
I don't doubt K-H will re-emerge from bankruptcy, but I have to say that having $60M in the bank going into Chapter 11 doesn't impress me. It just means they pulled the plug earlier. That certainly speaks to the reality-based nature of management, but it doesn't suggest to me they're in a dramatically different fundamental condition than other builders.


Yes, going into a Chapter 11 with $60M in cash is exceptional. I suspect that Kimball Hill hopes to use the Chapter 11 to avoid having to perform/pay on contracts where performance and payment are not yet due, e.g. duty to make a future capital contribution to a joint venture.

Usually, it's a good sign when a Debtor in Possession lender is lined up, prior to foreclosure, to provide operating funds going forward. For example, Engle is building new homes with DIP financing. So, if Kimball Hill is not going to ask the Bankruptcy Court for permission to take DIP financing, and continue building, then I would be scratching their head as to what they are planning on doing.

Clearly, under a Chapter 11, Kimball Hill can sell off its standing inventory of homes to consumer buyers, assuming they can find any. It's likely that Kimball Hill will get the bankruptcy court to sign an order saying that sales of standing inventory homes are being made in the ordinary course of business, and that there is no need for the bankruptcy court to approve each residential sale one by one. The title insurance companies will insist on that sort of order before insuring any post-bankruptcy filing sales.

I am going to assume there is no White Knight who will ride in and offer to buy all of Kimball Hill's land prior to Kimball Hill filing its proposed Chapter 11 Plan of Reorganization.

As a result, Kimball Hill employees, and tract sales agent working for brokers contracted to run K-H's sales offices, will just have to "stay turned" and see what the proposed Plan of Reorganization says about future plans.


I wouldn't count out the White Knight angle. K.H. has been talking, quietly, with a couple of different groups not only about buying specific land deals, but also various divisions. I have heard from two different divisions, but have not received confirmation from their Corporate Headquarters, that they have been shopping for someone to buy out their operations.
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