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Beazer denies being in default

September 11, 2007|From Times Wire Services

Beazer Homes USA Inc. has received two default notices from a trustee representing holders of about $1.5 billion in bonds, but the home builder denies it is in default.

Beazer said it received a default notice Thursday on $1.3 billion in notes. The company said Monday that it received a second default notice Friday covering $180 million in bonds.

Both notices give the company 60 days to comply with the trustees' demands for the company to file its fiscal third-quarter report with the Securities and Exchange Commission.

Although Beazer released its unaudited results for the period ended June 30, 2007, it has not filed its audited statement with the SEC.

The company has said it delayed the filing after discovering that its former chief accounting officer may have booked some liabilities in the wrong accounting periods.

Beazer said its board's audit committee made the discovery during an internal probe of practices at its mortgage unit, which is the subject of a federal investigation.

The company, which targets first-time home buyers, said its bond covenants did not include a deadline for it to file its quarterly statements with the SEC.

"The company believes that this notice of default is invalid and without merit, as are the other notices of default previously delivered by the trustee," Beazer said.

Atlanta-based Beazer has asked a federal court in Atlanta to declare that the delay in filing does not constitute a default and does not allow the bondholders to accelerate the repayment of the bonds.

Shares of Beazer fell 5 cents to $9.45.

Beazer disclosed the default notice after the stock market closed. Its shares are down 80% this year.

A spokesman for the U.S. Bank unit of Minneapolis-based U.S. Bancorp, which filed the default notices, declined to comment. A Beazer spokeswoman couldn't be reached for comment.

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