Chinese drywall settlement approved

TAMPA - A federal judge has given preliminary approval to a class action lawsuit that could bring relief to hundreds of homeowners stuck with Chinese drywall in their homes.

In his order, the judge wrote that the settlement is "fair, reasonable and adequate."

It's an estimated $800 million settlement.

For years, people have been sick in their own homes. Many were forced out because they or their family's health was in danger.

But the settlement only affects homeowners with certain drywall, from a company called Knauf Plasterboard.

David Durkee, a leading attorney for Chinese drywall cases, calls this settlement a good step.

"Anything that can get relief to these victims is very significant. And I don't really call it justice. You can't do justice to these victims. These victims have been too terribly damaged," Durkee said.

These homeowners have had their health, their homes and their credit scores damaged.
Many just abandoned the homes, leaving the corroded electrical wires and defective drywall inside.

Those with Knauf, who want to be a part of the settlement, will have three choices:

Use the selected contractor to gut and repair the house.
Select their own contractor and be reimbursed
Choose a discounted cash payout

"Knauf will fully remediate the home. They will fix the homes. They will replace the major appliances. They will fix the air conditioning system. It will be a gutted home and redone, " Durkee said.

The deal calls for Knauf to initially deposit $200 million in the repairs fund, which would be replenished as needed. A lead attorney for the plaintiffs has said the settlement is worth between $800 million and $1 billion, but a lawyer for the Chinese company disputed that estimate.

Steve Glickstein, a lawyer for Knauf Plasterboard Tianjin, said the company is pleased the judge granted preliminary approval, and is confident the settlement will receive final approval.

Around 55 percent of the people who would benefit from the settlement live in Florida, while roughly 35 percent live in Louisiana. The deal would resolve cases filed in both state and federal court.

Attorneys' fees and costs paid by Knauf are capped at $160 million and will not be deducted from homeowners' shares of the settlement money.

Chinese drywall was used in the construction of thousands of homes, mainly in the South, after a series of hurricanes in 2005 and before the housing bubble burst. The problems it has caused range from a foul odor to corrosion of pipes and wiring.