Top Chinese Drywall Maker, Homebuilder Reach Deal

It's unclear what Beazer Homes' settlement with Knauf Plasterboard Tianjian means for homeowners. But Beazer used the toxic drywall to build homes in Florida. Last month, a federal judge awarded $164,000 to a Louisiana couple who had the Knauf Chinese drywall in their home.

The largest manufacturer of Chinese drywall announced Monday it has reached a settlement with a major homebuilder.

Beazer Homes said it has built more than 100,000 homes in the past 10 years -- mostly in the Sun Belt. Some of those homes in Florida were built using toxic drywall imported from China.

Bill Cash, a lawyer who represents people who own homes in one of those developments, Hampton Lakes, near Tampa, said it wasn't clear yet what Beazer's settlement with Knauf Plasterboard Tianjian, the largest Chinese drywall manufacturer, meant for his clients.

"The news that Knauf is now settling with builders can only be good news for us because we know that Knauf is apparently willing to put some money out there to compensate people for the problem they caused," Cash said.

Between 2004 and 2007, Chinese drywall was used in thousands of homes -- especially along the Gulf Coast.

As tests later showed, the gypsum used to manufacture the Chinese drywall contained organic compounds not found in the domestic product. Private labs and the federal government confirmed what homeowners had been saying: The drywall gives off a rotten-egg, sulfurous smell that corrodes most metal with which it comes in contact. Homeowners say the odor also causes headaches and nosebleeds.

Homeowners sued homebuilders, who in turn sued the drywall manufacturers.

The whole mess ended up in U.S District Court in New Orleans where last month a federal judge awarded $164,000 to a Louisiana couple to cover all the costs associated with removing and replacing the Knauf Chinese drywall in their home.

With Monday's announcement, Knauf is indicating it now wants to settle its other cases without the courts. It said it is in settlement discussions with several other homebuilders.

What's not clear is how this settlement may affect other drywall manufacturers or homeowners whose builder may have gone out of business.

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