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WBM Settles Drywall Dispute for $24 Million

Four years after filing suit for removal of Chinese manufactured drywall that was making them sick and destroying their appliances and wiring,, relief is in sight for residents of Villa Lago at Renaissance Commons .

A federal judge in New Orleans has given preliminary approval to a $24 million settlement that would pay for crews to remove the Chinese drywall from the 328 units in the complex. The building is located in Boynton Beach, Florida.

Residents would also each get about $11,500 to pay for temporary housing and incidentals while their units are being remodeled, according to Washington, D.C. attorney Gary E. Mason, who led the negotiations with the drywall manufacturer, supplier, builder, developer, insureres, and others.

While settlements have been approved in other class-action lawsuits against Chinese drywall manufacturers, the one with Villa Lago is believed to be the first that involves a multi-unit complex,  Mason said.   Other settlements, worth an estimated $1 billion, affected single family homeowners, including some in Palm Beach County, he said.

The drywall disaster is blamed, in part, on Hurricanes Katrina and Rita in 2005. The massive rebuilding, combined with the brisk construction that preceded the collapse of the housing bubble, created a critical shortage of drywall. So, distributors and suppliers reached overseas.

Shortly after their new homes were completed, residents began complaining of foul smells that gave them headaches. At the same time, they discovered that air conditioners, refrigerators and other appliances stopped working.

Investigations revealed that the imported drywall emitted sulfurous gases that not only smelled like rotten eggs but also corroded cooper pipes. Villa Lago was built from 2007 to 2009, when hundreds of millions of square feet of Chinese drywall flooded into the United States.

The roughly 10,000 claims that were ultimately filed nationwide were sent to U.S. District Judge Edward Fallon in New Orleans to handle. Fallon gave Villa Lago residents until July 8 to file objections to the settlement. He will conduct a hearing in August to decide whether to finalize the agreement. Once he does, work can begin, Mason  said.