Beazer Homes USA's lender has sent the company notice that it is in default of its debt agreements and given the company 60 days to remedy the situation.

The filing was no surprise to Beazer, which says it is not in default of the terms of its agreements and that its lenders have erroneously interpreted the loan agreement. On August 21 Beazer filed a lawsuit with the U.S. District Court in Atlanta asking the court to keep its creditors from demanding the debt be paid back immediately.

"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," Beazer said in the lawsuit.

The holders of Beazer's senior notes, through their trustee the U.S. Bank National Association, say Beazer is in default because it has not given it a copy of the company's quarterly 10-Q report for the quarter that ended June 30.

Beazer counters that the loan agreements require it to give creditors copies of the 10-Q within 15 days AFTER it is filed with the SEC. Beazer has delayed filing its 10-Q because an independent internal investigation it has commissioned discovered some accounting entries from former quarters might have been misstated and that it wanted time to sort out the financial implications before filing the report.

"The Company's Audit Committee and its independent counsel are working expeditiously to complete the internal investigation as soon as practicable," Beazer said in its release Friday (Sept. 7)

Beazer hired an independent counsel to review its practices and records after a series of Charlotte Observer newspaper stories brought to light high levels of foreclosures of Beazer-built homes in some North Carolina neighborhoods. The stories also quoted buyers who said Beazer misstated their financial information in order to get their loans approved.