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Chinese Drywall Maker to Settle Defective Lawsuits

According to plaintiffs’ lawyers, Knauf Plasterboard Tianjin Co., (KPT) a Chinese drywall maker, agreed to pay at least $800 million to settle homeowner claims that defective building materials contaminated their homes with corrosive sulfur fumes.

Knauf agreed to settle claims involving about 4,500 properties that contain the defective drywall. Homeowners said the faulty wallboard emits noxious sulphur gases that corrodes copper coils and electrical and plumbing equipment.

The accord was announced before U.S. District Judge Eldon Fallon in New Orleans, who is overseeing about 12,000 suits filed over the contaminated drywall that have been consolidated for pretrial evidence gathering.

According to the plaintiff attorneys, “homeowners who can show they have KPT product in their homes will be covered and the costs of those repairs are covered by the agreement no matter how much the total cost may be to the company.”

According to state Attorney General James Caldwell, More than 1.1 million sheets of harmful Chinese drywall were used in Louisiana rebuilding projects after hurricanes Katrina and Rita struck in 2005.

About 55 percent of the property owners who may benefit from the settlement live in Florida while 35 percent are Louisiana residents, according to experts.

The remaining cases involve drywall made in China by units of Taishan Gypsum Co. and Beijing New Building Materials Public Limited Co., the judge said. Fallon said he will travel to Hong Kong to supervise depositions in the suits.

Other drywall suppliers, such as Miami-based Banner Supply Co., agreed in June to pay about $55 million to settle claims over the contaminated building materials made in China.

The consolidated case is In re Chinese-Manufactured Drywall Products Liability Litigation, 2:09-md-02047, U.S. District Court, Eastern District of Louisiana (New Orleans).

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