Chinese drywall Insurance settlement questioned in Miami

Two Miami homeowners who were victims of contaminated Chinese drywall announced in a news conference Friday, July 15th, 2011, they are opting out of a global settlement with Miami-based supplier Banner Supply Co.

Charles and Sandra Puckett said they would have their very own attorneys pursue Banner in local courts.

Banner and its insurers have agreed to pay $54.5 million to settle about 2,000 claims from Florida victims from the Chinese drywall fiasco.

The proposed money is viewed as a significant part of the eventual relief being sought by the plaintiffs’ attorneys, said Ervin Gonzalez, a partner with Coral Gables-based Colson Hicks EidsonbizWatch .

In an interview, Gonzalez warned that any efforts to pursue Banner outside the settlement could run into long delays if Banner if forced to file for bankruptcy.

“The reason Banner settled is they were hoping not to go into bankruptcy,” Gonzalez said. “A bankruptcy proceeding would tie up the litigation.”

Gonzalez sits on the plaintiffs steering committee, which helped arrange the settlement.

David Durkee and Victor Diaz, two other attorneys representing drywall victims, have criticized the Banner settlement, saying it might result in only $5,000 for many victims and attorneys’ fees and other costs would siphon off 50 percent of the money.

Gonzalez said plaintiffs’ attorneys are capped at 32 percent of funds for any one client’s settlement.
A more substantial settlement is being negotiated with Germany-based Knauf Plasterboard Tianjin, one of the manufacturers of the drywall.

The settlement is only for Florida, the state with the most Chinese drywall homes, because Banner only distributes in Florida. The settlement comes to an average of about $33,000 a claim. The high-sulfur, corrosive drywall is believed to have caused at least $100,000 in damages to each home.

Banner’s insurance companies are Chartis FCCI Insurance Co., Hanover American Insurance Co. and Maryland Casualty Co.bizWatch

The settlement awaits approval by U.S. District Judge Eldon E. Fallon in New Orleans, where Chinese drywall class actions are now being heard.

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