A Chinese drywall manufacturer facing thousands of homeowners' court claims and several other companies have agreed to pay to repair 300 homes in four states in a pilot program, an attorney involved in the deal said Wednesday.
Homeowners in Florida, Louisiana, Alabama and Mississippi whose homes had drywall manufactured by Knauf Plasterboard Tianjin Co. will be eligible to participate in the program and get their homes fixed, said Richard Duplantier Jr., an attorney for a Louisiana-based drywall supplier.
Duplantier said his client, Interior Exterior Building Supply, and several other homebuilders and insurance companies will help pay for the repairs.
"We want our customers and the homeowners who bought the drywall to get some relief," he said.
Knauf will play a role in picking which homes will be fixed, according to Duplantier.
"Which homes are part of the program is kind of an evolving process," he said.
Thousands have sued over damage from Chinese drywall installed in homes that has caused problems ranging from a foul odor to corrosion of pipes and wiring.
Attorneys were expected to announce the deal Thursday on the steps of the federal courthouse in New Orleans, where a judge is presiding over thousands of Chinese drywall claims.
Kerry Miller, a lawyer who represents Knauf, didn't immediately return a call and e-mail seeking comment.
The pilot program could pave the way for a larger settlement of more than 3,000 claims against Knauf.
U.S. District Judge Eldon Fallon, who is presiding over the consolidated claims, already has ruled in favor of plaintiffs and ordered extensive remediation in Chinese-drywall tainted homes.
In April, Fallon awarded more than $164,000 to a Louisiana family whose home was ruined by drywall made by Knauf Plasterboard and said the home needed to be gutted. Knauf argued that the family's home could be repaired for less than $59,000.
Earlier that month, he awarded $2.6 million to seven Virginia families whose homes had been ruined by drywall made by another Chinese manufacturer.
So far, Fallon's rulings only have covered property damage and haven't considered possible health problems. The first cases with medical claims won't be considered by the court until late 2010 or early 2011.
Thousands of homeowners, mostly in Florida, Virginia, Mississippi, Alabama and Louisiana, have reported problems with the Chinese-made drywall, which was imported in large quantities during the housing boom and after a string of Gulf Coast hurricanes.
The Consumer Product Safety Commission says homes tainted by Chinese drywall should be gutted and that electrical wiring, outlets, circuit breakers, fire alarm systems, carbon monoxide alarms, fire sprinklers, gas pipes and drywall need to be removed.
The drywall has been linked to corrosion of wiring, air conditioning units, computers, doorknobs and jewelry, along with possible health effects. Preliminary studies have found a possible link between throat, nose and lung irritation and high levels of hydrogen sulfide gas emitted from the wallboard, coupled with formaldehyde, which is commonly found in new houses, the commission said.
Many homeowners can't wait for help to get Chinese drywall out of their homes, but even with the pending announcement their future remains unclear.
"I would love to have some type of normalcy in my life five years after Katrina," said Thomas Stone, the fire chief in St. Bernard Parish, a suburb outside New Orleans hit hard by both Katrina and Chinese drywall. He sued after learning that his home was tainted by Chinese drywall.
The problem for Stone, and possibly thousands of others like him, is tracking down which company made the drywall in his home. He said it was not apparently not made by Knauf.
He blamed corrosion for causing a laptop computer and washing machine to malfunction in the past 18 months.
Associated Press writer Cain Burdeau in New Orleans contributed to this report.