Wall Street Journal (04/28/10) P. A8; Wotapka, Dawn; McQueen, M.P.
At least one Chinese drywall maker that produced tainted gypsum board now burdening U.S. homeowners with health issues and property problems has signaled its willingness to settle claims with American builders. The inferior material was brought in from China to replenish a shortage of domestic product during the housing boom. Now, however, homeowners are complaining that imports from Knauf Plasterboard Tianjin Co. Ltd. (KPT) and other Chinese manufacturers has led to corrosion of metals, caused air conditioners and other appliances to fail, and produced a sulfurous odor as well as triggered human reactions including headaches and itchy skin. More than 3,000 reports of defective drywall have been submitted in 37 states. The U.S. Consumer Product Safety Commission and the U.S. Housing Department have advised affected homeowners to remove any offending material and replace electrical components and wiring that may have become corroded. KPT just this week settled with one Louisiana homeowner for $164,000, and a court judgment earlier in April awarded seven families in Virginia $2.6 million — more than $385,000 each — against a different Chinese drywall firm. The settlement costs are considered low, based on what actual remediation costs are believed to be. “It would certainly be in the interest of some builders to accept less, because they get the money up front,” said Tulane University law professor Edward Sherman. “A global settlement may be coming, but it may be many years off.”