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Beazer Seeks Court's Help On Debt

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By KATHLEEN M. HOWLEY and BRIAN LOUIS, Bloomberg News

Published: September 15, 2007

Beazer Homes asked a court to order a bondholders group to withdraw default notices sent after the company failed to file financial reports.

Beazer filed a motion also asking the federal court in Atlanta to order the trustee for its debt investors to stop it from taking steps to accelerate debt payments, the Atlanta-based company said Friday in a Securities and Exchange Commission filing.

The Federal Bureau of Investigation is investigating the company for potential fraud and the SEC has opened an investigation. The company said Aug. 10 that it hired independent attorneys and forensic accountants to find out whether the company's former chief accounting officer may have improperly recorded reserves and accrued liabilities.

The directors and officers of Beazer also have been sued in a Delaware court by a shareholder who alleges they wasted corporate assets and damaged the company's reputation by failing to prevent improper business practices, including illegal mortgage lending.

Beazer said it hasn't been able to file its quarterly report with the SEC on time because of the internal investigation.

The company filed a lawsuit last month against the trustee for the debt investors, U.S. Bank National Association, asking a federal court to block debt holders from declaring the company in default on $1.3 billion in debt.

The company said it has received notices of default from the trustee and claims the notices have no merit. Beazer said in August that it may not be able to borrow enough money to refinance its debt if it is forced to make an accelerated repayment.

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