(Source: Palm Beach Post)
South Florida builder WCI Communities Inc. has agreed to set up a trust account to help owners in developments such as the Parkland Golf & Country Club pursue claims over Chinese drywall used in their homes as part of its bankruptcy case.
On Friday, Judge Kevin J. Carey of the U.S. Bankruptcy Court for the District of Delaware approved the disclosure statement for WCI, which allows the Bonita Springs-based firm to begin soliciting votes in approval of its revised bankruptcy reorganization plan.
A hearing to confirm the plan is scheduled for Aug. 26. The terms of the plan have already been agreed on by the steering committees for the company’s senior secured and revolving lenders, the Official Committee of Unsecured Creditors and representatives of homeowners affected by tainted Chinese drywall.
Under the proposed plan, WCI will create a Chinese Drywall Trust and appoint an independent trustee that would be allowed to pursue claims against insurers and third parties related to “the manufacture and installation of defective imported drywall in their homes,” WCI said in a prepared statement.
The company will give the trust $900,000 as essentially seed money to help offset the cost of litigation against insurers and other companies along the Chinese drywall supply chain. The proposed plan also gives the trust a small stake in the company.
“We are very pleased to have cleared this important hurdle in our path toward exiting from chapter 11,” David L. Fry, interim president and chief executive of WCI, said in a statement about the approval of the disclosure statement.
Read Allison Ross’ full article “Builder to give homeowners $900,000 trust to pursue Chinese drywall complaints” in the Palm Beach Post (July 20, 2009).