The management of the TECHNICAL OLYMPIC Group announces that its listed on New York Stock Exchange (NYSE) USA subsidiary, TECHNICAL OLYMPIC USA INC. (TOUSA), notified the USA Capital Market Commission (SEC) that on October 31, 2006 and November 1, 2006, Technical Olympic USA, Inc. (the Registrant) and its subsidiary, TOUSA Homes L.P. (the TOUSA Homes and collectively with the Registrant, the Companies), received letters (the Demand Letters) from Deutsche Bank Trust Company Americas (the Administrative Agent) demanding payment under certain guaranties entered into in connection with the issuance of debt to the Registrant''s unconsolidated Transeastern joint venture (the Joint Venture). The Joint Venture has borrowed $675.0 million of third party debt pursuant to a senior credit agreement, senior mezzanine credit agreement and junior mezzanine credit agreement (the Credit Agreements). Deutsche Bank serves as the administrative agent for each of the Credit Agreements. The Credit Agreements are secured by the Joint Venture''s assets and ownership interests and are non-recourse to the Companies, except that the Companies have entered into completion agreements relating to completion of work on property as to which work was in process at the time of execution of the Credit Agreements on August 1, 2005, in the event the Joint Venture failed to do so (the Completion Guarantees) and carve out guarantees to indemnify the lenders for losses resulting from fraud, misappropriation and similar acts by the Joint Venture or full repayment of the loans in the event the Joint Venture voluntarily filed for bankruptcy protection (the Carve Out Guarantees and collectively with the Completion Guarantees, the Guarantees). The Demand Letters allege that the Joint Venture has failed to comply with certain of its obligations pursuant to the Credit Agreements and as a result multiple potential defaults and events of default have occurred which allegedly have triggered the Companies'' obligations pursuant to the Guarantees, and demand that the Companies pay all of the outstanding obligations under each of the Credit Agreements. The Companies do not believe that their obligations pursuant to the Guarantees have been triggered, have formally disputed the allegations and are in discussions with the Administrative Agent and the lenders concerning this situation.