A day after filing a petition for Chapter 11 in the U.S. Bankruptcy Court for the Northern District of Illinois, Kimball Hill Homes received court approval for all of the company's first-day motions. Taken together, the approvals will allow the company to continue normal operations.
On Thursday April 24, Judge Susan Sonderby granted permission to continue customer programs and warranties, pay employee wages and benefits, establish procedures to pay valid lien claims in the ordinary course of business and to sell homes free and clear of all liens.
In addition, the company was authorized to immediately use $35 million of cash to support normal operations. In an earlier statement, the company disclosed that it had $60 million in cash on hand.
"Having received approval of our first-day motions so quickly sets Kimball Hill Homes on a very strong footing as we move towards restructuring," said Ken Love, president and CEO.
In the meantime, Kimball Hill is actively seeking investors interested in buying an equity stake in the company, including private-equity firms, hedge funds and real estate funds, according to a court document filed by CFO Edward Madell. Roughly 26 parties "continue to actively evaluate the prospect" of an investment in Kimball Hill, the document says.
In the original petition, Kimball Hill listed assets of $796 million and debts of $632 million. Liabilities associated with the company's joint venture activities and financial services business were not included in the filing.