On Thursday in New Orleans, Judge Fallon announced at the monthly status conference for the Chinese Drywall MDL that a global settlement has been reached with Knauf (KPT). The settlement will include all plaintiffs who filed claims against KPT prior to December 9, 2011.
The final settlement document is not presently available. It will be made public and posted on the Court's website December 20, 2011.
The general terms of the settlement were described as follows:
The homeowner will have three (3) options to choose from.
1. The homeowner can participate in a remediation performed by Moss Construction (essentially the same settlement as the pilot remediation program); or,
2. A self-remediation with a "qualified contractor" of the homeowner’s choosing; or,
3. A pure cash-out option. The cash-out option will not include the $8.50 per square foot for move out cost. In addition, the cash-out option will be provided at a $4.00 per square foot discount from the remediation cost.
Finally, the settlement will create a $30 million "other loss," fund. Plaintiffs can make claims against this fund for economic losses caused by Chinese drywall as well as claims for personal injuries. The economic losses envisioned for this fund include those homeowners who have been foreclosed on or were forced into a short-sale because of toxic and corrosive Chinese drywall.
In addition, Knauf has agreed to pay attorneys’ fees and costs up to $160 million. This option will make homeowners whole because attorney’s fees will not be taken out from this option.
There will be no details of the settlement until the settlement documents are released on December 20, 2011. A preliminary settlement approval hearing will be held on January 4, 2012. After that, it is anticipated that a fairness hearing will be held in front of Judge Fallon sometime in either June or July of 2012.
For those homeowners whose claims are already in the pilot remediation program, this settlement should have little effect on that process moving forward.
