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.
Foreclosures surged 58 percent in the past six months
According to the real estate research firm RealtyTrac, the number of homes facing foreclosure rose 58 percent in the first six months of 2007 to 573,397 properties, compared with 363,672 properties in the same period last year.
California saw the highest number of foreclosure-related notices at 104,572 properties, more than 50 percent higher than one year ago and 80 percent higher than in the previous six months. Florida, Ohio and Texas followed with large double-digit increases in foreclosures.
In response to California’s growing foreclosure rate, a consumer group called the California Reinvestment Coalition has begun advocating for a moratorium on home foreclosures. The coalition is a group of nonprofit organizations that advocates on behalf of poor and minority residents.
Alan Fisher, executive director of the coalition, told the San Jose Mercury News that a six-month moratorium would give the Senate Banking, Finance and Insurance committee time to figure out a way for people to keep their homes.
“The curve is really starting to go up. We’re seeing just the beginning of a problem,” Fisher told the newspaper.
IKEA workers strike in B.C.
Workers at an IKEA store in Richmond, B.C., have gone on strike, following a failure by the Teamsters Local 213 and Swedish-based retailer to reach a five-year pay contract. Store manager Doug McCann opted to close the store while workers are picketing, according to news reports.
The Teamsters have asked the retailer to eliminate its two-tier wage schedule, which the Teamsters say gave the company the ability to charge lower wages to new employees. The company reportedly was willing to eliminate the two-tier system over six years. The company and Teamsters’ last three-year contract expired on Dec. 31, 2006.
According to the Vancouver Sun, IKEA then offered a five-year deal that included raises of 2 percent in each of the first three years and 3 percent in the next two years. That deal was rejected in a 61 percent vote by workers.
The Teamsters also are requesting general improvements in wages and more full-time positions at the store.
None of IKEA’s 11 other stores in Canada are unionized.