An overwhelming majority of the holders of Beazer Homes USA's debt have agreed to let the company slide on not reporting earnings to the U.S. Securities and Exchange Commission until next May, stopping short company worries that its debtors would demand immediate repayment of the $1.5 billion in loans, something the company has said it couldn't do.

"This provides us with the time it takes to get the restatements [of earnings] done," said Leslie H. Kratcoski, Beazer's vice president of investor relations and corporate communications.

Holders of $1.4 billion of the company's debt agreed to the changes. In return for their votes, they will collectively be paid $18,379,660.

Beazer hasn't filed full earnings reports for its last two quarters and said it can't until an independent auditor finishes its work on the company's books. The auditor had uncovered accounting errors that require Beazer to restate its financial statements for 2004 through 2007 and that will impact its financial results back to 1999.

The holders of the company's $1.525 billion of senior notes and convertible senior notes notified Beazer that it was in default of its loan agreements by not providing them with a copy of its financials for the quarter ended June 30.

Beazer filed a lawsuit against the bondholders, asking a judge to keep them from calling their loan and to agree with its interpretation of the borrowing agreement. Beazer has denied it was in default, saying that the company is required to give the bondholders a copy of its financial results after it files them with the SEC, but, since it had not given the SEC copies, it was not required to give the bondholders copies either.

Before the judge ruled on the matter, Beazer decided to try to make peace with its lenders by offering to pay those who agreed to amendments to the loan agreements that would let them pass on filing financial results until next May.

Last week, just a day before the deadline for bondholders to send in their consent agreements, Beazer sweetened the offer, agreeing to pay considerably more to those who agreed to the amendments and offering to restrict its borrowing ability to no more than $700 million until the company has four consecutive quarters with a fixed charge coverage ratio of at least 2.0 to 1.0. Before, the company could borrow 40% of its consolidated tangible assets. The amendments also allow Beazer to invest up to $50 million in joint ventures or unrestricted subsidiaries.

Kratcoski said the lawsuit, which asked a judge to interpret the company's loan documents, will continue because Beazer wants clarity on the issue for the future. While this gives the company relief from some of its woes, it still remains under federal investigation for its mortgage origination practices. The company hired its own independent investigators to look into the allegations and recently released their findings, saying that it had found evidence that its mortgage lending arm did violate HUD rules for down payments on federally-backed FHA loans. The investigations into the company's lending practices began after the Charlotte Observer printed a series of articles documenting a high rate of foreclosures among Beazer's North Carolina homes.

The auditors also reported that the company violated generally accepted accounting principals by putting aside too much for the development of communities and homes for several years and then flooded that extra cash into earnings for 2006. Another GAPP error occurred in its home lease-back/sale program. The net result of correcting the errors should be a slight increase in profit, according to company estimates.

Beazer fired its chief accounting officer Michael T. Rand in June after discovering that he attempted to destroy documents in relation to the investigation into its mortgage origination business. In February, the company fired its general counsel Kenneth Gary due to a "pattern of personal conduct, which includes violations of company policies." In March, Beazer's chief financial officer Jim O'Leary announced his resignation from the company to become CEO of Kaydon Corp.