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WCI Communities Reports 200 Florida Homes with Chinese Drywall

Jul 23, 2009 | Parker Waichman LLP Florida builder WCI Communities Inc. says that at least 200 of its homes  may have been  built with potentially defective Chinese drywall. According  to The Bradenton Herald, the Bonita Springs builder - which is in Chapter 11 bankruptcy - could face $40 million in Chinese drywall related claims.

The Consumer Products Safety Commission has received more than 681 complaints from residents of 20 states regarding Chinese drywall.   The most reports - 510 - have come from Florida. Homeowners have complained that fumes from the Chinese drywall produce a “rotten eggs” odor that permeates their homes, and causes metal, including air conditioning coils and even jewelry, to corrode. Eye irritation, sinus problems and respiratory symptoms have also been reported among people living in homes containing Chinese drywall.

Recently, tests conducted by the Environmental Protection Agency revealed that Chinese-manufactured drywall contained elevated levels of strontium sulfide, as well as several organic compounds associated with the production of acrylic paint which were not present in samples of U.S.-made drywall. Recently, some concerns have arisen that some Chinese drywall could also be radioactive. According to an LA Times investigation, some Chinese drywall manufacturers used phosphogypsum – a radioactive phosphorous substance – to manufacture wallboard. At least four manufacturers told the Times that drywall made with phosphogypsum was shipped to the U.S. in 2006. Phosphogypsum contains radium which, over time, can increase lung cancer risks. Phosphogypsum has been banned in the U.S. for use in construction since 1989.

WCI Communities first acknowledged using Chinese drywall early this year.  In January, it set aside $11 million to handle drywall claims.   "To date, and subject to further investigation and confirmation, the debtors have identified approximately 200 homes sold by the Debtors that may contain Chinese drywall,” WCI said in a disclosure statement filed July 2 in federal bankruptcy court in Delaware.

As we reported earlier this week, WCI's bankruptcy plan includes a trust to help homeowners with Chinese drywall. The trust would be able to file lawsuits against drywall manufacturers and other responsible parties, the proceeds of which would fund remediation and pay for the damages inflicted on homeowners with Chinese drywall. The WCI trust would include $900,000 to pursue claims.

WCI Communities is far from the only Florida builder to have used Chinese drywall in its homes.  Earlier this month, we reported that Lennar Homes said that at least  400 homes it built in the state had drywall issues.   The builder also said it had put aside $39.8 million to repair the homes.

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