Despite Herculean efforts to avoid it, Rolling Meadows, Ill.-based Kimball Hill Homes filed for Chapter 11 bankruptcy protection late last month, issuing a press release in which company president and CEO Ken Love says, "The next step in our restructuring is to strengthen our capital structure and position our company to weather the current storm that has hit the housing and capital markets."

The firm is actively seeking investors interested in an equity stake, including private equity companies, real-estate funds and hedge funds. A statement filed with the bankruptcy court by Kimball Hill CFO Edward Madell says 26 parties are actively evaluating the possibility of investing in the troubled builder.

This is an interesting twist to the current trend of investment funds swooping in to acquire land from distressed home builders or lenders. Why buy land without an organization capable of adding value by entitling and developing that land, building homes and selling the package at retail prices?

Kimball Hill is No. 29 in Professional Builder's just-released Giant 400 rankings, holding that position for a second consecutive year despite a 28.4 percent drop in fiscal 2007 (ending Sept. 30) housing revenues and 20.4 percent fewer closings.

Kimball Hill lost $220.5 million in the fiscal year ending Sept. 30, 2007. The company exited the Milwaukee, Wis., Portland, Ore., and Vancouver, Wash., markets last year — and has announced plans to be entirely out of Florida by the end of this year. It continues to operate in Texas, Nevada and California in addition to Illinois.