Kimball Hill filed for Chapter 11 bankruptcy on Wednesday after several months of renegotiating the terms of loans with its lenders. The Rolling Hills-based company is the second large homebuilder to face bankruptcy. Neumann Homes, Inc. filed for bankruptcy late last year.

The company has debts totaling $631.9 million, according to court papers filed in the U.S. Bankruptcy Court in Chicago. The developer continues to seek investors to refinance the loans, but is facing one of the most difficult credit markets in recent years.

Kimball Hill has been hit hard by a sharp downturn in sales around the Chicago region. Sales in the Chicago suburbs fell by more than 20 percent in 2007. According to data from the Chicago Association of Realtors, a total of 44,937 homes were sold around the Chicago region during the year, down from 57,999 homes sold in 2006.

The company is still in negotiations with investors, and is looking to sell an equity stake to cover the outstanding loan balance and continue operations. President and CEO Ken Love said in a news release by the company, “We have had significant discussions with potential plan sponsors and our senior lenders already, and we hope to agree on a reorganization plan in the next 90 days.” According to the report, the company will continue to deliver homes despite the bankruptcy filing, including homes on the North Shore Chicago Real Estate market.

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This entry was posted on Friday, April 25th, 2008 at 10:59 am and is filed under Evanston Real Estate(t) . You can leave a response.