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NEWTOWN SQUARE, PA-GMH Communities Trust again delays the filing of its 2005 annual report on Form 10-K with the SEC while an independent audit by Ernst & Young continues. According to a statement from the locally based specialty REIT, it expects to file the 10-K no later than May 15. For previous GlobeSt.com coverage, click here.

The same statement reports that Bradley Harris, CFO, has been terminated from employment and replaced by Dennis J. O’Leary as interim CFO. O’Leary, a certified public accountant, has been a member of the GMH board since the company’s initial public offering in late 2004. On March 13, as CFO, Harris initiated the events leading to the audit in a letter to the company’s audit committee in which he alleged “a ‘tone at the top’ problem with company management.” The letter has not been made public.

GMH has further defined its 2005 guidance. On March 13, it said funds from operations would not exceed 72 cents a share. It now expects FFO to range between 65 cents and 70 cents a share, and expects earning per diluted share to fall between 17 cents and 21 cents a share.

Gary M. Holloway Sr., chairman, president and CEO, reiterated in a statement, “none of the identified material weaknesses in internal controls has affected the day-to-day operations of the company’s student housing properties and military housing projects, and the audit committee’s independent counsel report concluded that the investigation did not uncover any instance in which anyone…intentionally instructed the financial department to falsify financial information.” He said the “extensive review,” underscores “our goal to assure a solid foundation for the company going forward.”

On March 13, Holloway told the board he was considering making an offer to buy the company. At the same time, the board formed a special committee to consider and analyze “strategic and financial alternatives,” which included any offer that might be made by Holloway. Through a spokesperson, Joseph Macchione, GMH’s internal general counsel, tells GlobeSt.com, “the special committee and Gary Holloway, individually, are still studying strategic alternatives.”

At the open of the NYSE today 3, GCT stock began trading at $11.21 a share. The 52-week high of $17.10 a share occurred on March 1 this year, and the 52-week low of $10.80 a share, occurred three weeks later on March 21. GMH Communities Trust is unrelated to GMH Capital Partners and its affiliate, GMH Associates, which is a private company, also based here.

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