Miami supplier of Chinese drywall agrees to settlement

When Banner Supply Company, based in Miami, purchased some 1.4 million sheets of drywall from a Chinese supply company, they received certifications and warranties that the product was safe. More than 10,000 defective product claims, most coming from Florida and the Gulf Coast region, indicate that those claims were not accurate. The Chinese drywall has been linked with countless defects, including an unpleasant odor, corrosion of electrical wiring and damage to appliances and other electronic devices.

Banner, its affiliates and insurers have made a settlement offer to resolve many of the claims against it for providing the defective drywall. The offer of roughly $55 million is subject to review and approval by the U.S. District Judge who is presiding over the litigation. Even this substantial settlement will only cover a portion of the damage suffered by homeowners through the use of this defective product. There may be many more homeowners who failed to recognize the damage or failed to connect it to the defective drywall in their homes.

The Chinese company that supplied the defective product, Knauf Plasterboard Tianjin Co., will likely face litigation from Banner for the claims it made about the drywall product. In 2007, it reportedly agreed to replace roughly 44,000 drywall pieces it supplied to Banner. The company’s role in this much larger defective product settlement remains to be seen.

If accepted, the question will turn to how the settlement is to be divided among the many plaintiffs whose homes were damaged by Chinese drywall supplied by Banner. As the money will not be enough to cover the losses of every person harmed, it is sure to be a question of some interest to those affected.

Source: The Washington Post, “Fla. Construction supplier agrees to $55M Chinese drywall settlement; thousands of claims left,” Associated Press, 14 June 2011.