The Chinese Drywall Crisis: Chinese Drywall Supplier Reaches $55 Million Settlement With Florida Homeowners

During the housing boom from 2004 to 2009, approximately 309 million square feet of Chinese drywall was imported into the United States. The imported drywall contained sulfur compounds when exposed to heat and moisture released sulfuric acids causing noxious smells and the corrosion of metals. Copper components, such as wiring, refrigerator coils and coils of air handling units became significantly corroded prompting a number of lawsuits involving property damage and health issues. The majority of the litigation was in the Southeast United States. The A&C blog has been following this litigation (see here and here).

The Associated Press reported, on June 15, 2011, that the Chinese drywall supplier Banner Supply Company (“Banner”) agreed to a $55 million settlement of the claims that the corrosive product damaged homes. The claims involved were largely Florida homeowners where Banner is based. The overall settlement covers just a portion of the homeowners’ claims, which blame the drywall for a host of problems. Insurers contributed to the settlement. Banner merely distributed drywall manufactured in China after receiving certifications and warranties from the Chinese manufacturer that the drywall was safe and not defective in any way. The homeowners’ lawyers, however, alleged that Banner was aware of builder complaints about the drywall’s odor in October 2006 and “yet continued to sell it.”