$80M Settlement Awarded for Chinese Drywall Cases
A major class-action suit against Interior/Exterior Building Supply Ltd. of Louisiana (InEx) was announced, in which $80 million will be made available to compensate claims of defective Chinese drywall that damaged thousands of homes in Louisiana and nationwide.
The company will pay $8 million, while assigning its insurance rights to $72 million. The case had been consolidated into multi-district litigation, or MDL, in federal court in New Orleans before Judge Eldon Fallon who will have to approve the settlement.
Information in this post gathered in association with a Los Angeles workers compensation attorney
The settlement was reported in Bloomberg by Laurel Brubaker Calkins and Allen Johnson, Jr. in Chinese Drywall Lawsuits Are Partially Settled by Louisiana Supplier InEx. The company’s main insurers each will pay out $4 million. InEx’s excess coverage in the amount of $72 million comes from North River Insurance Company.
The settlement divides claimants into two categories: those covering Louisiana property owners and those including all other U.S. homeowners. The excess insurance will be used for the non-Louisiana claims.
InEx had purchased over 500,000 pieces of drywall from the Knauf Group and other Chinese manufacturers in 2005 and 2006. Over 1.1 million sheets of the drywall were used to rebuild homes in Louisiana following hurricanes Rita and Katrina. In all, about 14,000 claims have been filed nationwide.
The drywall was found to exude foul-smelling odors and gases that corroded wiring and appliances. Homeowners were forced to replace the drywall at considerable expense.
The $80 million settlement is considered an initial step in a final settlement of Chinese drywall cases worth an estimated $500 million.
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