Chinese Drywall Claims Deadline Extended in WCI Communities BankruptcyJun 17, 2009 | Parker Waichman LLP
Some people living in Chinese drywall-tainted homes built by WCI Communities will have until July 15 to file claims against the Florida-based builder. According to naplesnews.com, a federal bankruptcy judge ordered the extension, which applies to a group of about 50 homeowners, and specified several Parkland developments, including the Parkland Golf and Country Club on the Florida’s east coast.
Homeowners in at least 18 states have complained that fumes from Chinese-made drywall produce a “rotten eggs” odor and cause metals, such as air conditioning coils, to corrode. The fumes have also been associated with respiratory and sinus problems in some residents. According to a recent Wall Street Journal article, the U.S. imported roughly 309 million square feet of drywall from China during the housing boom from 2004 to 2007.
Last month, the Environmental Protection Agency (EPA) released results of tests it conducted that compared Chinese drywall to American-made material. The tests found sulfur and two organic compounds associated with acrylic paint in the Chinese drywall that were not present in the American wallboard. The agency said more testing is needed to determine if any of the compounds found in the Chinese drywall are responsible for problems reported by homeowners.
WCI Communities is one of several Florida builders whose homes have been the subject of Chinese drywall complaints. As we reported previously, WCI - which had filed Chapter 11 bankruptcy last August - acknowledged using Chinese drywall in some of its homes three days after the Feb. 2 deadline for creditors to file claims in the bankruptcy case had passed.
The bankruptcy judge originally extended the deadline for filing proof of claims in the WCI bankruptcy to May 11, naplesnews.com said. According to the motion ordering the second extension, much of the information emerging about potential problems with the drywall came after the first February deadline, including a case definition established by the Florida Department of Health. All of the drywall claimants in WCI case fit that definition, naplesnews.com said.
The Chinese drywall debacle has spawned scores of lawsuits across the country. On Monday, the Judicial Panel on Multidistrict Litigation issued an order consolidating federal lawsuits in a multidistrict litigation (MDL) and transferring all pending and future Chinese drywall cases to the U.S. District Court for the Eastern District of Louisiana. The order means that right now, a total of 10 suits pending in federal courts in Florida, Louisiana and Ohio will move to New Orleans. Eventually, as many as 1000 such lawsuits from across the country could be headed to New Orleans, Law.com said.
An MDL allows all cases to be coordinated under one judge for pretrial litigation to avoid duplicative discovery, inconsistent rulings and to conserve the resources of the parties, witnesses and the court. When lawsuits are consolidated as an MDL each retains its own identity. If the MDL process does not resolve the cases, they are transferred back to the court where they originated for trial.