Chinese Drywall: Banner Supply Chinese Drywall Settlement: Not Everyone is Happy
In June, Banner Supply Company, a South Florida drywall distributor, entered a proposed preliminary settlement in New Orleans Federal District court to compensate homeowners living in houses built with defective Chinese drywall supplied by the firm. Banner’s four insurance companies, Chartis, Inc., FCCI Insurance Co., Hannover American Insurance Co., and Maryland Casualty Co., would pay the $55 million total settlement, which would be divided among various homeowner plaintiffs, according to a report in Business Insurance (“ Insurers join proposed settlement in defective Chinese drywall case,” by Jeff Casale). But attorneys representing some plaintiffs are opposing the settlement — at least for now. And they’re trying to spread the word to homeowners whom they don’t represent, to be careful about the details. CNN reports on a conference call held by South Florida attorneys Victor Diaz and David Durkee (“ Plaintiffs hold off on proposed settlement in toxic drywall suit,” by Chelsea Bailey): “In a conference call Friday, plaintiffs' attorneys Victor Diaz and David Durkee claimed Miami-based Banner Supply is withholding essential information that would allow their clients to make informed decisions about whether or not to accept the proposed settlement.” Said Diaz, “They refuse to tell us what assets Banner has ... As far as we know the company itself is contributing nothing to this settlement and they won't tell us how many people are going to split up this money. If this really were a good settlement, there would be complete transparency of all of the facts so that consumers can make an informed decision." In a press release, a publicist for Durkee and Diaz wrote: “1. The amount of money homeowners are eligible to recover is not being disclosed prior to the deadline to participate or opt out. 2. Each homeowner stands to receive – based on the information that is known – a net settlement of approximately $4000 to $6000, which is insufficient for homeowners who have had to completely gut their homes and relocate during the rebuilding process. The proposed $54 million settlement has terms that will allow attorney fees of up to 32% of the fund, and no restrictions for the costs that attorneys can claim. After fees and costs are paid, approximately $25 million will be left for homeowners. Thus, the bulk of the money — approximately 50% -- will go to pay attorneys' legal fees and ‘administrative’ costs. 3. If homeowners do not opt out by the deadline, they will be responsible for almost the entire cost of repair to their homes. This will force many to simply abandon their homes and let them fall into foreclosure. 4. For many homeowners, Banner and its insurers are the only source of recovery and those homeowners will be left holding the bag for essentially their entire cost to repair their homes. This will force many to abandon their homes and let them fall into foreclosure. Already, many homes are being foreclosed.”
