Proposed Chinese Drywall Settlement with Supplier AnnouncedApr 27, 2011 | Parker Waichman LLP
Insurance companies for a Chinese drywall supplier have agreed to pay to settle claims over the defective wallboard. The Chinese drywall settlement, which according to an Associated Press report, would involve Interior/Exterior Building Supply and two of its three insurers, still must be approved by the judge overseeing the massive Chinese drywall litigation underway in New Orleans federal court.
According to the Associated Press, the insurers - Arch Insurance Company and Liberty Mutual Fire Insurance Company - will pay $8 million to settle as many as 1,500 Chinese drywall claims. Interior/Exterior Building Supply supplied Chinese drywall made by Knauf Plasterboard Tianjin Co. and Taishan Gypsum Co. That drywall was used in homes built in Texas, Louisiana, Mississippi and Alabama.
Chinese drywall lawsuits allege that the wallboard caused foul odors and corrosion problems in their homes.
Interior/Exterior Building Supply's third insurer, The North River Insurance Company, isn't part of the proposed settlement. But a lead attorney for the plaintiffs said that they will continue to pursue roughly $72 million in claims against that firm.
About 10,000 Chinese drywall lawsuits are pending in the multidistrict litigation before U.S. District Judge Eldon Fallon. According to the Associated Press, Interior/Exterior Building Supply was already participating in a pilot settlement program with Knauf Plasterboard that involves repairs to some 300 homes.
Since late 2008, the U.S. Consumer Products Safety Commission (CPSC) has received more than 3,800 reports from residents in 42 states, the District of Columbia, American Samoa, and Puerto Rico regarding defective Chinese drywall.