NEW ORLEANS (CBS4) – A federal judge in New Orleans has given preliminary approval to a $55 million settlement of claims against Banner Supply Co., a Miami based company which supplied defective Chinese drywall to contractors and builders.

U.S. District Judge Eldon Fallon’s approval on Thursday sets the stage for more hearings and filings. Some homeowners and installers of the tainted drywall oppose the settlement, which was announced in June.

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If it is ultimately approved, the settlement would resolve claims by thousands of plaintiffs against the company and its insurers. 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.

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.

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Homeowners have complained 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.

Fallon is presiding over more than 10,000 claims involving damage to buildings blamed on defective Chinese-made drywall.

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