A Chinese drywall manufacturer has agreed to pay hundreds of millions of dollars toresolve court claims by thousands of property owners in Florida and other states who say the product corroded pipes and wires and otherwise wrecked their homes.
It’s the largest settlement of its kind so far.
The deal announced Thursday by U.S. District Judge Eldon Fallon calls for Knauf Plasterboard Tianjin Co. to create an uncapped fund to pay for repairing roughly 4,500 properties, mostly in Florida, Louisiana, Mississippi and Alabama.
A separate fund capped at $30 million is to pay for other types of losses, including those by people who blame drywall for health problems.
The manufacturer late last year started a pilot program to repair hundreds of homes containing its defective drywall. About 30 of the homes initially scheduled for repairs were in Broward and Palm Beach counties, with more to be added. Repairs took about three months and cost up to $100,000.
Russ Herman, a lead attorney for the plaintiffs, said the settlement was worth between $800 million and $1 billion, although an attorney for the Chinese company disputed that estimate.
“We’re very thankful for our clients,” Herman said.
Knauf attorney Kerry Miller said the company “decided to step up and settle these claims and do the right thing.”
Herman said that about 55 percent of the people who would benefit from the settlement live in Florida, while roughly 35 percent live in Louisiana. The deal would resolve cases filed in both state and federal courts.
Chinese drywall was used in the construction of thousands of homes after a series of destructive hurricanes in 2005 and before the housing bubble burst. The problems it has caused range from a foul odor to corrosion of pipes and wiring.
Steven Roberts, a plaintiff who built a home in Boynton Beach in 2005 with Knauf drywall, said the first sign of trouble was a foul odor that smelled like “bitter sulfur.” His family did not suspect a more serious problem until electrical appliances started failing and corrosion formed on mirrors and bathroom fixtures.
Roberts, 37, a veterinarian, said he could not afford to repair all the damage or move his wife and daughter out, so he hoped the settlement could finally end their ordeal.
“It would be a huge weight lifted off our shoulders,” he said. “It’s been extremely challenging for my wife, very stressful. It’s definitely a relief to potentially have the end in sight.”
The judge must sign off on the settlement before any money is distributed. Although Fallon could give his preliminary approval to the deal in January, it is likely to take several more months for money to reach homeowners.
Knauf agreed to initially deposit $200 million in the repairs fund, which would be replenished and to replenish it as needed.
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