Comstock Homebuilding, unit receive notice of default on trust note, loan agreement

By Caroline Salls

Pittsburgh, Oct. 24 - Comstock Homebuilding Cos., Inc. and wholly owned subsidiary Comstock Bellemeade, LC received a letter purporting to be a default notice from Bank of America, NA under its deed of trust note, loan agreement and guaranty agreement, according to an 8-K filing with the Securities and Exchange Commission.

The company said it has notified the lender that it disputes the default assertion and that it intends to begin arbitration proceedings.

Comstock and Bank of America are in discussions regarding the dispute, according to the filing.

If the companies are found to be in default, the lender will be entitled to exercise a variety of rights, including accelerating the loan, terminating the loan and reducing its claim to a judgment.

In addition, Comstock Homebuilding, directly or indirectly through other subsidiaries, could be deemed to be in default under other credit facilities, which would potentially give its other lenders the right to exercise their rights with respect to about $200 million of outstanding debt.

Comstock Homebuilding is a Reston, Va.-based diversified real estate development firm with a focus on moderately priced for-sale residential products.

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