Chinese Drywall Manufacturer Reaches Settlement with Homeowners
The settlement is between $600 million and $1 billion.
Getty Images
Homeowners blame Knauf for manufacturing drywall that damaged their homes.
A Chinese drywall manufacturer has agreed to settle court claims Thursday by South Florida homeowners who blame the product for damaging their homes.
A settlement announced by U.S. District Judge Eldon Fallon calls for Knauf Plasterboard Tianjin Co.to create an uncapped fund to pay for repairs for an estimated in 4,500 homes, mostly in Florida, Louisiana, Mississippi and Alabama.
The settlement is between $600 million and $1 billion and will cover the costs to repair all of the houses affected, according to a lawyer for the South Florida class-action lawsuit, Ervin Gonzalez.
Russ Herman, lead attorney for the plaintiffs, said 55 percent of the people who would benefit from the settlement live in Florida and 35 percent in Louisiana.
The settlement creates a separate, capped fund that could compensate people who blame health problems on the drywall.
Thousands of homes mainly in the South were affected by installation of Chinese drywall that has a foul odor, can corrode wiring and metal in appliances and can cause health problems.
The attorneys for the homeowners argued in court that they have proof Knauf knew the drywalll was defective, but didn't tell homeowners.
Knauf attorney Kerry Miller said the Germany-based company "decided to step up and settle these claims and do the right thing."
Herman said the deal wouldn't benefit many, if any, residents of Virginia because the settlement is limited to one manufacturer. Virginia residents received most of their drywall from other Chinese companies.
Fallon must sign-off on the settlement before any money is distributed.
Separate settlements have been reached or are in process with other manufacturers.
Attorneys in Florida previously opposed a $53 million federal settlement over the faulty drywall in hopes of pursuing lawsuits in state courts.
Copyright Associated Press / NBC 6 Miami
