More federal drywall suits settle for $800 million

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By Sylvia Hsieh
Dolan Newswires

In another settlement over tainted drywall, German manufacturer Knauf agreed to a proposed settlement of between $800 million and $1 billion to resolve thousands of federal claims over contaminated drywall sourced from a subsidiary in China.

Property owners alleged in class action suits that the drywall contained impurities including a high sulfur content that in humid climates emitted harmful odors and fumes causing damage to property and health.

The settlement will cover about 4,500 properties. Relief includes remediation of the property, payment for personal injury claims and compensation for losses due to foreclosures and short sales. Properties that have a mixture of Knauf’s drywall and other Chinese drywall will receive partial payments. The settlement also includes attorney fees and costs.

Russ Herman, liaison counsel for the plaintiffs, said in a press release that while the company is not admitting fault, it “really stepped up to the plate by participating in this settlement.”

“[B]y being accountable, [Knauf] has agreed to provide thousands of families and resident owners the opportunity to recover losses caused by [its] drywall,” said Herman, a partner at Herman, Herman, Katz & Cotlar in New Orleans.

The settlement is subject to court approval by U.S. District Court Judge Eldon E. Fallon in New Orleans who is overseeing between 10,000-12,000 drywall cases in multidistrict litigation.