What happens when a builder goes bankrupt?
Several north Texas communities are learning the answer the hard way.
Many are unfinished and are now out of luck. Kimball Hill Homes announced Tuesday that it is shutting down all operations across the country in the next 15 months.
This affects five different developments in Tarrant, Dallas and Collin Counties.
Homeowners here are now very worried that this is going to be a huge financial loss for them too.
Jason Roberts bought his south Arlington home two years ago. It was a long-term investment for his family. But he didn't think he would outlast his homebuilder Kimball Hills.
"It is a bit disappointing to see that at such an early stage in our community development they're pulling out. And they're leaving us sort of high and dry," he said.
A statement released by Kimball Hill's Chief Executive Officer Ken Love says: "We deeply regret the necessity of today's decision, but given the current housing and financial market conditions, we are simply unable to conduct normal operations while the company continues its sale efforts."
The company says homes already under construction will be finished, but they are not building any new homes. They are looking to sell the unfinished lots.
"At this point, we don't know where it's gonna go. So you don't know if right across the street in the new phase if they decide to sell if off to somebody else, are they going to put condominiums in or apartments? At this point we don't know where it's going to go," said Roberts.
This also means homeowners association dues may dramatically increase.
"The community as a whole may suffer. Because we don't have the cash flow coming in to help us with the greenbelts, and the attractiveness and appeal of the area," said Roberts.
Just how much more, remains to be seen.
Warranties on home bought after April 23rd will be honored.
But for home purchased before this date will not have a Kimball Hill warranty.
There are five Kimball Hill properties in Tarrant, Collin and North Texas affected.
Thursday, December 4, 2008
Wednesday, December 3, 2008
Kimball Hill Banruptcy - Homebuilder is Winding Down Operations
Kimball Hill Homes, an institution in the Northwest suburbs for 55 years, will be going out of business, the company announced Tuesday. Chapter 11 bankruptcy did not help the Chichago homebuilder and they are done.
"Over the next 15 moths, we will be phasing down operations, said Ken Love, chief executive officer, in a telephone interview.
Within six months, the company will finish the approximately 500 homes it has under construction and under contract, including about 110 in the Chicago area, he said. The 120 deposits that buyers have placed on homes that have not yet been started will be returned. That includes about 40 in the Chicago area.
No homes will be started, but approximately 260 inventory and model homes will be available for purchase.
Of 400 Kimball Hill employees, 100 are in the Chicago area, Love said. Some were notified of their termination Tuesday, others will stay with the company for all or part of the wind-down period.
"We deeply regret the necessity of today's decision, but given the current housing and financial market conditions, we are simply unable to conduct normal operations while the company continues its sale efforts," Love said in a statement.
Beginning the wind-down process now ensures the smoothest transition possible for employees, home buyers, creditors and the communities where the company builds, he said.
If the company is not sold within 60 days, the opportunity for a sale will diminish, according to Love. A single buyer is preferred.
The homebuilder filed for Chapter 11 bankruptcy protection in April due to lower demand for homes during one of the worst housing markets in decades.
A year ago, the company listed assets of $795.5 million and a debt of $631.9 million, but that was the amount paid for the assets, and their current market value is not really known, Love said.
The company also said has requested a hearing on Jan. 12 to approve the disclosure statement accompanying its Chapter 11 plan.
Besides proceeds from home sales, the company has access to more than $35 million from loans obtained during the bankruptcy process.
This will ensure that employees, subcontractors and tradespeople will be paid for their work, he said. The people who will lose money include lenders and shareholders, he said.
Kimball Hill Homes is believed to have built more than 10,000 homes in the Chicago area. Most recent building has been in Bartlett, Elgin, Naperville, McHenry, Montgomery, Shorewood and Yorkville.
A predecessor to this company was started by a lawyer named Kimball Hill, who is considered founder of Rolling Meadows because his company built almost 4,000 homes there in three years beginning in 1953. His son, David Hill, who died July 26, took over leadership of the company in 1969 and later expanded into nine states and 15 metropolitan areas.
During the current housing slump, the company quit building in Florida, Ohio, Oregon and Wisconsin. It continued operating in Illinois, Nevada, Texas and California
"Over the next 15 moths, we will be phasing down operations, said Ken Love, chief executive officer, in a telephone interview.
Within six months, the company will finish the approximately 500 homes it has under construction and under contract, including about 110 in the Chicago area, he said. The 120 deposits that buyers have placed on homes that have not yet been started will be returned. That includes about 40 in the Chicago area.
No homes will be started, but approximately 260 inventory and model homes will be available for purchase.
Of 400 Kimball Hill employees, 100 are in the Chicago area, Love said. Some were notified of their termination Tuesday, others will stay with the company for all or part of the wind-down period.
"We deeply regret the necessity of today's decision, but given the current housing and financial market conditions, we are simply unable to conduct normal operations while the company continues its sale efforts," Love said in a statement.
Beginning the wind-down process now ensures the smoothest transition possible for employees, home buyers, creditors and the communities where the company builds, he said.
If the company is not sold within 60 days, the opportunity for a sale will diminish, according to Love. A single buyer is preferred.
The homebuilder filed for Chapter 11 bankruptcy protection in April due to lower demand for homes during one of the worst housing markets in decades.
A year ago, the company listed assets of $795.5 million and a debt of $631.9 million, but that was the amount paid for the assets, and their current market value is not really known, Love said.
The company also said has requested a hearing on Jan. 12 to approve the disclosure statement accompanying its Chapter 11 plan.
Besides proceeds from home sales, the company has access to more than $35 million from loans obtained during the bankruptcy process.
This will ensure that employees, subcontractors and tradespeople will be paid for their work, he said. The people who will lose money include lenders and shareholders, he said.
Kimball Hill Homes is believed to have built more than 10,000 homes in the Chicago area. Most recent building has been in Bartlett, Elgin, Naperville, McHenry, Montgomery, Shorewood and Yorkville.
A predecessor to this company was started by a lawyer named Kimball Hill, who is considered founder of Rolling Meadows because his company built almost 4,000 homes there in three years beginning in 1953. His son, David Hill, who died July 26, took over leadership of the company in 1969 and later expanded into nine states and 15 metropolitan areas.
During the current housing slump, the company quit building in Florida, Ohio, Oregon and Wisconsin. It continued operating in Illinois, Nevada, Texas and California
Denver's Adare Homes Hohnstown Farms LLC Files Chapter 11
Adare Homes Johnstown Farms LLC has filed for Chapter 11 bankruptcy protection, according to court documents.
The Greenwood Village-based homebuilder listed assets and liabilities of $1 million to $10 million on documents filed Dec. 2 in U.S. Bankruptcy Court in Denver. It named only four major creditors.
Adare Homes LLC, also based in Greenwood Village, builds homes in communities along the Front Range, including Commerce City, Greeley and Brighton, according to the company’s website.
The Greenwood Village-based homebuilder listed assets and liabilities of $1 million to $10 million on documents filed Dec. 2 in U.S. Bankruptcy Court in Denver. It named only four major creditors.
Adare Homes LLC, also based in Greenwood Village, builds homes in communities along the Front Range, including Commerce City, Greeley and Brighton, according to the company’s website.
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