For those following the Chinese drywall saga and its potential liability for USG:1. "In a landmark ruling on contaminated Chinese drywall, a federal judge in New Orleans awarded $2.6 million in damages Thursday to the owners of seven Virginia homes ruined by the tainted wallboard. U.S. District Court Judge Eldon E. Fallon's decision went far beyond federal regulators' recent recommendations for fixing homes, and because the judge is overseeing the combined drywall litigation, his ruling could affect thousands of victims....Still unclear is who exactly will pay the potentially hundreds of millions of dollars in damages related to these cases......" 2. "Fallon ordered that any repairs must include removal of all drywall along with most components and electronic devices in a home -- essentially gutting a house down to the studs....He called for "removal of all drywall, all electrical wiring, the entire HVAC system, and many other items such as appliances, carpet, cabinetry, trim work and flooring....Fallon set the remediation costs at an average of $86 per square foot -- putting most of the Virginia homes in the $200,000 to $300,000 range to repair." 3. As of year-end, USG reported that about 2,600 homeowners were represented so far in the class action, and that additionally there are also individual suits (USG got about half the 179 brought against it so far tossed). With this week's news of this large-dollar judgment on this first seven, plaintiff attorneys are looking to enlist more homeowners who might be affected. 4. USG doesn't know who it shipped specifically their Chinese drywall to, however it does know who it shipped drywall to, overall. As claims come up, they check to see if any drywall was shipped to that claimant's house or site. If none (no US or Chinese), USG gets excused.5. USG's Chinese-sourced drywall was only 1% of its volume in years affected. But the challenge is in proving a specific home didn't get it from them. USG knows in total that they sold Chinese drywall sufficient to build 250-300 homes. However it has no way of knowing how much of any home's shipment might be Chinese-sourced vs it's more typical US-sourced product. So their potential liability is to owners whose builders sourced from USG, and who also somehow ended up with some Chinese product in the home. 6. The potential liability may certainly be mitigated in that right now the 'collection' discussion is centering on how to get some leverage on the Chinese so that they will pick up the tab. USG thinks it is already adequately reserved.
Best Of |
Favorites & Replies |
Start a New Board |
My Fool |
BATS data provided in real-time. NYSE, NASDAQ and NYSEMKT data delayed 15 minutes.
Real-Time prices provided by BATS. Market data provided by Interactive Data.
Company fundamental data provided by Morningstar. Earnings Estimates, Analyst Rat