Kimball Hill gets month-long reprieve

Lenders are giving homebuilder Kimball Hill Inc. roughly another month to "formulate and implement a long-term solution to reposition" itself.

With its last loan extension agreement ending today, the Rolling Meadows-based developer this morning announced another extension to its $500 million credit line.

In a two paragraph announcement, the builder of much of Rolling Meadows and several other suburban towns said its extension will last until April 11.

"We are engaged in active discussions with our lenders and we appreciate their support to extend the current waiver agreement to help facilitate a long-term amendment," said Chief Executive Officer Kenneth Love, in a statement "During this period, we continue homebuilding operations as usual."

Last month, Kimball Hill said it is leaving the Florida housing market and cutting 75 jobs across the country, including some at its Rolling Meadows headquarters.

Earlier this year, the company warned that it may face bankruptcy.

However, since that first warning Love and Chief Restructuring Officer Andrew Hede of New York-based turnaround firm Alvarez & Marsal have sounded optimistic about the company's future.

"We have a company both with a great heritage and a great future," said Love, last month. "We have a management team that is undaunted."

Kimball Hill has operations in Illinois, Texas, Nevada and California.

Kimball Hill has several projects under way in the Chicago suburbs, including Sugar Grove, where its Settlers Ridge had planned to develop 2,470 homes on 1,300 acres. Just 150 to 200 permits have been applied for, according to Sugar Grove officials.

The company has been led since 1969 by area philanthropist and Harper College Trustee David K. Hill, who gave up his role as chief executive officer last year and still serves as chairman of its board. He is the son of founder Kimball Hill.

Kimball Hill isn't alone among homebuilders in the area suffering from a housing depression and credit woes.

Earlier this year, South Barrington-based Kennedy Homes laid off 20 of its 32 employees and suspended new home building. More recently, Kennedy Homes filed a civil suit against a group of lenders led by Harris bank alleging the group lent it too much money and is now improperly asking for its repayment. Along with fraud and other charges, Kennedy asked the court for up to $1.2 billion.

Warrenville-based Neumann Homes sought Chapter 11 protection in the fall.