Knauf Plasterboard Tianjin, a major manufacturer of problem drywall from China, has agreed to pay hundreds of millions of dollars to repair 4500 mostly Gulf Coast area homes ruined with its product.
The settlement, announced Thursday by U.S. District Court Judge Eldon Fallon, ends a nightmare for about 1,575 Louisiana families which began when many rebuilt their homes after Hurricane Katrina or purchased new ones with corrosive wallboard, prolonging the agony of the storm. With their properties unfit for residence or sale, many have lost their homes to foreclosure or been devastated financially as they were forced to rent apartments while continuing to make their mortgage payments.
The deal is likely worth $800 million to $1 billion based on the number of homes, average size and repair cost, plaintiff liaison counsel Russ Herman said. That means that some $280 million to $350 million could flow to Louisiana, which is believed to have about 35 percent of all homes with Knauf-brand drywall.
Knauf attorneys said the amount of the settlement ultimately depends on how many homeowners can prove that they have drywall produced by their client.
The settlement will pay the full cost of repairing homes and sets aside money to cover losses such as foreclosures or short sales. Although money has also been set aside to cover health problems, Knauf attorney Steven Glickstein said that from Knauf's point of view, there is no evidence that problem drywall is responsible for personal injuries.
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