NEW ORLEANS (CBS4) – A Miami company which supplied defective Chinese drywall to contractors and builders has agreed to pay $55 million to settle claims that the corrosive product damaged homes.

On Tuesday lawyers for Banner Supply, several related companies and their insurers along with lawyers for homeowners who have filed claims against the companies urged U.S. District Judge Eldon Fallon in New Orleans to approve the deal.

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Only owners whose homes contain Chinese drywall supplied by Banner would be eligible for shares of the settlement fund.

Banner purchased roughly 1.4 million sheets of Chinese drywall. When they notified their Chinese supplier about the complaints, the supplier replaced the Chinese-made drywall with American-made drywall. In return, Banner Supply allegedly signed a confidentiality agreement to not say anything about it to the government or its customers.

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The Chinese made drywall in question has been found by state and federal agencies to emit “volatile sulfur compounds.” Researchers also found traces of strontium sulfide, which can produce a rotten-egg odor, along with organic compounds not found in American-made drywall. Homeowners complain the compound’s fumes have corroded copper pipes, destroyed TVs and air conditioners, blackened jewelry and silverware.

Some homeowners believe it also has caused health problems, such as upper respiratory problems, irritated eyes and bloody noses. Health implications from the degradation are still being investigated.

The Consumer Product Safety Commission has received more than 33 hundred homeowner complaints from 32 states including Florida, Washington, D.C., and Puerto Rico, in one of its largest consumer product investigations in U.S. history.

An analysis of shipping records found that more than 500 million pounds of Chinese gypsum board was imported between 2004 and 2008, enough to have built tens of thousands of homes.

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