Four thousand homeowners whose houses were ruined by contaminated Chinese gypsum board will have to wait a little longer for relief. After years of stonewalling, Taishan Gypsum Co. Ltd. has finally agreed to participate in U.S. Federal Court proceedings in New Orleans. But now, the company's Chinese parent says it really doesn't control Taishan — and shouldn't be on the hook for the damage Taishan's product has done.
The Times Daily of Florence, Alabama carries the report (see: "Chinese drywall maker's 65 percent owner wants out of suit"). "Beijing New Building Materials PLC [BNBM] filed a motion Wednesday asking U.S. District Judge Eldon Fallon to schedule a hearing on its request to get out of the lawsuit," the paper reports. "Taishan operates independently and with separate management," attorneys for BNBM told the court. "The two companies have entirely separate finances, assets, and liabilities. They make and market different drywall under different brands. Neither is the other's agent and neither signs or fulfills the other's contracts."
For years, attorneys pursuing Taishan have been looking for signs that the the inscrutable Chinese entity has U.S. business activities that make it vulnerable to U.S. enforcement efforts. (Knauf, the parent company of another Chinese drywall firm, decided to comply with U.S. court rulings after it became clear that the German-based conglomerate had too much at stake in the U.S. market to attempt to defy U.S. authority in the drywall matter). Now, the plaintiffs think they've found a connection: they say Taishan's owners are still doing business in the U.S. — through Wal-Mart. Law 360 has a report on that situation (see: "Wal-Mart Must Testify In Chinese Drywall MDL Contempt Row," by Brandon Lowrey).
Reports Law 360: "U.S. District Judge Eldon E. Fallon on Friday summarily granted the multidistrict litigation plaintiff's steering committee's emergency motions to compel discovery from nonparties Wal-Mart and SunPin Solar Development LLC. The committee's April 8 motion sought information pertaining to whether Taishan affiliates violated the order in a deal with Sunpin for a roof power plant project and the construction of roof solar power plants for Wal-Mart stores in North America."
Meanwhile, property owners who have finally been compensated for the damage to their properties by Chinese drywall made by other suppliers have received a new blow: The tax man is taking a bite out of their winnings, the Sarasota Herald-Tribune reports (see: "Taxation meets Chinese drywall contamination," by Josh Salman).
Virginia homeowner Colleen Stephens, who sold her home in a short sale after living in a trailer and a rented apartment for six years after discovering that her house was built with defective Chinese drywall, "received just a sliver of the tens of thousands of dollars she had invested into the house, by way of class-action settlements in the drywall lawsuits," the paper reports. "Now the government wants Stephens — and thousands of others like her — to pay taxes on those reimbursements." The organization distributing payouts in the class action lawsuit, the paper reports, is sending Stephens (and thousands of other successful plaintiffs in the suit) 1099 forms listing their awards as income.
"There are varying opinions from attorneys and accountants familiar with these types of settlement reimbursements about whether the drywall victims should be taxed," the paper reports. "But some of the homeowners who spoke to the Herald-Tribune said just they can't afford the latest financial burden. They are calling on Congress for help."
"Our losses far outweighed what we earned back," Stephens told the Herald-Tribune. "This is our money, and we already paid taxes on it. Why should we have to pay again?"