Beazer Homes files to stop collection by creditors
Beazer Homes, the Atlanta-based home builder with operations in 22 states, has filed a complaint with the U.S. District Court in Atlanta to block creditors from demanding immediate payment of $1.3 billion in loans.
Beazer recently delayed filing its quarterly financial report, and in its complaint filing said creditors are "improperly seeking a windfall" by calling in the loans.
"The motivation for this effort is clear. Many of the noteholders, including various hedge funds and other opportunistic investors, have purchased Beazer's bonds at depressed prices in the market and are now improperly seeking to secure a windfall by demanding accelerated repayment in full," the company said in a statement.
Beazer has experienced problems in its quarterly filing because, the company has said, its former chief accountant, Michael Rand, may have overstated the company's reserves and other costs.
According to the Atlanta Journal Constitution, the company's filing could indicate it violated a debt agreement with some of its creditors by delaying its quarterly report.
The company also is being investigated by the U.S. Attorney's office because of an "unusually high" foreclosure rate in Charlotte, N.C.-area Beazer communities. The company's CFO and chief counsel also resigned earlier this year.