Beazer Homes Reportedly to Pay Subs Late

The Charlotte (N.C.) Observer newspaper reported in early November that Beazer Homes USA is delaying payments to subcontractors in Nashville, Tenn., as a way to weather one of recent history's most turbulent housing declines. The Observer reported that it had obtained a letter dated Nov. 5 and signed by Beazer's Nashville division President David Hughes, who said, It is unfortunate, but we cannot

The Charlotte (N.C.) Observer newspaper reported in early November that Beazer Homes USA is delaying payments to subcontractors in Nashville, Tenn., as a way to weather one of recent history's most turbulent housing declines.

The Observer reported that it had obtained a letter dated Nov. 5 and signed by Beazer's Nashville division President David Hughes, who said, “It is unfortunate, but we cannot continue the prompt payments you have received in past years.”

The letter is addressed to Beazer “trade partners.”

Beazer has been going through turbulent times.

On Oct. 11, Beazer Homes USA announced interim findings from its Audit Committee's previously announced independent internal investigation into the company's mortgage origination business and accounting and financial reporting matters.

The Audit Committee determined that it will be necessary for Beazer to restate its financial statements for fiscal years 2004 through 2006 and the interim periods of fiscal 2006 and fiscal 2007. The restatement is also expected to impact the financial results for fiscal years 1999 through 2003.

Last March, a representative of the FBI told news media that Beazer was being investigated for mortgage fraud.

The company and Beazer Mortgage Corp. have received a subpoena from the U.S. Attorney's Office in the Western District of North Carolina seeking documents focusing on Beazer's mortgage origination services. In addition, the Securities and Exchange Commission issued a formal order of private investigation to determine whether the company has violated federal securities laws, including the anti-fraud, books and records, internal accounting controls, periodic reporting and certification provisions.