slid 10% Friday after the homebuilder said it has received a notice of default tied to its senior notes.
The Atlanta-based company called the notice "invalid and without merit."
The notice, which came from the trustee of the indentures governing Beazer's senior notes, said the builder is in default because it hasn't filed its quarterly report for the period ended June 30 with the
Securities and Exchange Commission
, and also because it hasn't delivered it to the trustee. The notice said the issue will become an actual event of default if it isn't remedied within 60 days.
Beazer claims it is in default because the indentures require only that the company deliver the reports within 15 days after the filing is made with the SEC.
Beazer has delayed filing its quarterly report because of an ongoing internal investigation into its mortgage-origination business. Last month, the company filed a legal action against the trustee, U.S. Bank National Association, seeking a declaration that the filing delay does not constitute a default.
Shares of Beazer recently were down $1.17 to $9.74. The heavily shorted stock has fallen more than 75% since the beginning of the year amid the collapse of the housing market and the mortgage investigation.