0001104659-08-026505.txt : 20080424 0001104659-08-026505.hdr.sgml : 20080424 20080424154831 ACCESSION NUMBER: 0001104659-08-026505 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20080421 ITEM INFORMATION: Changes in Registrant.s Certifying Accountant ITEM INFORMATION: Regulation FD Disclosure FILED AS OF DATE: 20080424 DATE AS OF CHANGE: 20080424 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRESLER & REINER INC CENTRAL INDEX KEY: 0000014073 STANDARD INDUSTRIAL CLASSIFICATION: OPERATORS OF APARTMENT BUILDINGS [6513] IRS NUMBER: 520903424 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-06201 FILM NUMBER: 08774378 BUSINESS ADDRESS: STREET 1: 11200 ROCKVILLE PIKE, SUITE 502 CITY: ROCKVILLE STATE: MD ZIP: 20852 BUSINESS PHONE: (301) 945-4300 MAIL ADDRESS: STREET 1: 11200 ROCKVILLE PIKE, SUITE 502 CITY: ROCKVILLE STATE: MD ZIP: 20852 8-K 1 a08-12399_18k.htm 8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) April 21, 2008

Bresler & Reiner, Inc.

(Exact name of registrant as specified in its charter)

Delaware	0-06201	52-0903424
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

11200 Rockville Pike, Suite 502, Rockville, MD			20852
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code (301) 945-4300

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 4.01. Changes in Registrant’s Certifying Accountant

On April 21, 2008, we notified Deloitte & Touche LLP (“Deloitte & Touche”), the principal independent accountant engaged to audit the Company's financial statements, that they were dismissed. The dismissal was recommended by the Audit Committee and approved by the Board of Directors, Bresler & Reiner, Inc. (“Bresler & Reiner” or the “Company”). Effective as of that date, the Company has appointed Aronson & Company to serve as its independent auditors for the current fiscal year, which ends on December 31, 2008.

Deloitte & Touche’s audit reports on the Company’s consolidated financial statements for each of the past two fiscal years did not contain an adverse opinion or disclaimer of opinion, nor were such reports qualified or modified as to uncertainty, audit scope or accounting principles. During each of our two most recent fiscal years and through the date of this report, there were: (i) no disagreements between the Company and Deloitte & Touche on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to Deloitte & Touche’s satisfaction, would have caused them to make reference to the subject matter in their report on the Company’s consolidated financial statements for such years; and (ii) there were no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.

During 2007, the Company consulted with Aronson & Company who advised the Company on the appropriate accounting treatment related to the partial sale of an interest in a real estate joint venture and the entering into an agreement for the exchange of a leasehold interest for land. The Company’s accounting treatment in its annual financial statements for the year ended December 31, 2007 for both of these transactions was consistent with the advice provided by Aronson & Company. A memorandum from Aronson & Company regarding the aforementioned transactions is attached hereto and incorporated herein as Exhibit 99.1.

The Company’s annual financial statements for the year ended December 31, 2007, reported on by Deloitte & Touche LLP and included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, reflected the accounting treatment related to both the partial sale of an interest in a real estate joint venture, which resulted in a $18,721,000 gain, and the entering into an agreement for the exchange of a leasehold interest for land, which resulted in no gain. Additional information related to these transactions is included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

Deloitte & Touche has been provided a copy of the above disclosure with a request that it furnish to the Company a letter addressed to the Securities and Exchange Commission stating whether it agrees with the statements made by the Company and, if not, stating why it does not agree. A letter from Deloitte & Touche is attached hereto and incorporated herein as Exhibit 16.1.

Item 7. Financial Statements and Exhibits.

Exhibit 16.1 – Letter from Deloitte & Touche to the Securities and Exchange Commission dated April 24, 2008.

Exhibit 99.1 – Memorandum from Aronson & Company regarding the Waterfront Transaction

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to the signed on its behalf by the undersigned hereunto duly authorized.

	BRESLER & REINER, INC., Registrant


Date: April 24, 2008	By:	/s/ Sidney M. Bresler
		Sidney M. Bresler
		Chief Executive Officer

EX-16.1 2 a08-12399_1ex16d1.htm EX-16.1

Exhibit 16.1

April 24, 2008

Securities and Exchange Commission

100 F Street, N.E.

Washington, D.C. 20549-7561

Dear Sirs/Madams:

We have read Item 4.01 of Bresler & Reiner, Inc.’s (the “Company”) Form 8-K dated April 24, 2008, and have the following comments:

1. We agree with the statement made in the first sentence of the first paragraph. We have no basis on which to agree or disagree with the statements made in the second and third sentences of the first paragraph.

2. We agree with the statements made in the second, fourth and fifth paragraphs.

3. We have no basis on which to agree or disagree with the statements made in the third paragraph; however, based on discussions with management of the Company, we were aware that the Company consulted with Aronson & Comapny from time to time.

Yours truly,

Deloitt & Touche LLP

McLean, Virginia

EX-99.1 3 a08-12399_1ex99d1.htm EX-99.1

Exhibit 99.1

www.aronsoncompany.com

To: Darryl Edelstein

From: Aronson & Company

Subject: Waterfront Transactions

Factual Background

The factual background is provided in your January 27, 2007 memorandum labeled Waterfront Transactions.

Issue 1- $25 million equalization payment

SOP 79-8 states in paragraph 39: The division believes that a sale of an investment in a real estate venture (including the sale of stock in a corporate real estate venture) is the equivalent of a sale of an interest in the underlying real estate.

The relevant literature concerning sales of underlying real estate is SFAS 66. Paragraph 33 captioned: The seller has made a partial sale. A sale is a partial sale if the seller retains an equity interest in the property or has an equity interest in the buyer. Profit (the difference between the sales value and the proportionate cost of the partial interest sold) shall be recognized at the date of sale.

Determination of the proportional cost is shown on the attached excel file (B&R provided) and is approximately $6,300. The difference between this and the sales price of $25 million is approximately $18,700 and is the amount which should be recognized as a gain.

Issue 2-Exchange of leasehold interest for land

I don’t believe that any gain recognition is appropriate for this transaction. This conclusion results from the following: failure to meet the standards for revenue recognition and paragraph 3c of SFAS 153 regarding exceptions to the use of fair value in exchange transactions.

1. Revenue recognition. The lease agreement and the Land Disposition agreement will be viewed as a single transaction as it does not meet the criteria in EITF 00-21 for multi-element revenue recognition. (in short because the District would not have done the disposition transaction absent the lease transaction). Since we have future service obligations (providing the leased space), no revenue can be recognized up front.

2. Paragraph 3c of SFAS 153 and its related footnote 3 contains exceptions to the use of fair value in exchange transactions, and states:

Exchange (or exchange transaction) is a reciprocal transfer between an enterprise and another entity that results in the enterprise’s acquiring assets or services or satisfying liabilities by surrendering other assets or services or incurring other obligations. fn3 A reciprocal transfer of a nonmonetary asset shall be deemed an exchange only if the transferor has no substantial continuing involvement in the transferred asset such that the usual risks and rewards of ownership of the asset are transferred.

Based on both failing the revenue recognition criteria and the above exception to the use of fair value in exchange transactions, no gain should be recognized on the land disposition and there should be no change in the underlying basis of the partnership assets.