The trustee for Beazer Homes USA’s senior notes has sent default notices to the company because it hasn’t yet filed its June 30 quarterly report. The trustee told the embattled homebuilder that it would be in default if it doesn’t file within 60 days, according to Beazer.
In a press release, the company stated on Friday that it doesn’t believe it is in default. Under the terms of the note contract, Beazer must only deliver copies of its Securities and Exchange Commission reports to the trustee within 15 days after the reports are filed with the commission. “Therefore, the company believes that the notices of default are invalid and without merit,” it said.
The company added that it has asked the U.S. District Court in Atlanta to declare that the filing delay doesn’t mean it’s in default. Still, much remains at stake here. If, after the 60-day period, Beazer is still deemed to be in default, its note holders could demand an acceleration of payments on the notes.
Last month Beazer reported it would delay the filing of its June quarterly report as a result of the findings of an internal probe into its mortgage-origination business. The company added Friday that the internal probe is ongoing and that it’s not able to predict if it will need to adjust previously issued financials. Beazer did add it does not believe the amounts in question “are quantitatively material.”
In May Beazer disclosed the SEC had launched an informal inquiry to determine whether any person or entity related to the company had violated federal securities laws.