Rolling Meadows, Ill.-based Kimball Hill Homes asked the courts for a 90-day extension--until Nov. 19--to file a recovery plan, according to legal documents filed Wednesday in U.S. Bankruptcy Court for the Northern District of Illinois.
Its exclusive right to submit a plan ends Aug. 21, and without exclusivity, the company fears "debtors' resources would no doubt be pulled in unproductive directions such that the value of the estates would quickly dissipate to the detriment of all creditors and parties in interest."
The builder, which filed for Chapter 11 bankruptcy protection on April 23, originally expected to have a recovery plan in place within 90 days.
Kimball Hill said it "has made substantial progress in terms of case administration and toward the negotiation of a consensual plan, but needs more time to negotiate with senior secured prepetition lenders and the creditors committee regarding terms."
Records show the company has conducted a plan sponsor process that includes contacting over 100 potential investors. Of those, 50 signed confidentiality agreements and completed more indepth diligence. At this point, the company said it has a "firm grasp of the range of options upon which to base a consensual plan."
Kimball Hill is the second largest builder in bankruptcy, after Hollywood, Fla.-based TOUSA.
In the case of Kimball Hill, court records show there are 30 debtors, and their consolidated assets and liabilities are each in the hundreds of millions of dollars. In addition, the debtors have "tens of thousands of creditors spread across multiple creditor constituencies, are parties to numerous joint-debtor joint venture agreements with significant restructuring issues of their own, and are subject to complex intercompany issues."
The hearing date to determine the outcome of the requested extension is set for Aug. 12.