Beazer
Homes USA, Inc. announced today that on September 7, 2007 it received
a
purported default notice from U.S. Bank National Association, the trustee
under
the indenture governing Beazer’s outstanding 4 5/8% Convertible Senior Notes due
2024. The notice alleges that, by reference to the Trust Indenture
Act, the
Company is in default under the indenture because it has not yet filed
with the
Securities and Exchange Commission and delivered to the trustee its
Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 2007. The
notice
further alleges that these defaults will become events of default under
the
indentures if not remedied within 60 days.
The
Company does not believe that it is in default under the indenture
governing its
outstanding convertible senior notes. The indenture does not contain
an express
financial reporting covenant requiring that Beazer file periodic reports
with
the SEC or deliver to the trustee copies of Beazer’s SEC reports within any
prescribed time period. Therefore, 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
has today filed an Amended Complaint For Declaratory Judgment And Injunctive
Relief in an action pending in the United States District Court for
the Northern
District of Georgia, Atlanta Division against the trustees under the
applicable
indentures. Beazer is seeking, among other relief, a declaration from
the court
against the trustees that the delay in filing with the SEC Beazer’s
Form 10-Q for the third quarter does not constitute a default under the
applicable indentures and that the delay will not give rise to any
right of
acceleration on the part of the holders of the senior notes.
As
previously disclosed in the Company’s August 15, 2007 Form 8-K Current Report,
the Company’s delay in filing its third quarter Form 10-Q is the result of a
continuing independent internal investigation by the Audit Committee
of the
Company’s Board of Directors. The Company’s Audit Committee and its independent
counsel are working expeditiously to complete the internal investigation
as soon
as practicable. For a further explanation of the investigation and
related
matters, including certain risks related to the alleged defaults under
the
indentures governing the Company’s senior notes and convertible senior notes,
please refer to the Company’s August 15, 2007 Form 8-K Current
Report.
A
copy of
a press release issued today announcing receipt of the purported
notice is
attached hereto as exhibit 99.1 and is incorporated into this Item
by
reference.