NEW ORLEANS (AP)—A Chinese drywall manufacturer has agreed topay hundreds of millions of dollars to resolve court claims bythousands of Gulf Coast property owners who say the productcorroded pipes and wires and otherwise wrecked their homes, thelargest settlement of its kind so far.

The deal announced Thursday by U.S. District Judge Eldon Falloncalls for Knauf Plasterboard Tianjin Co. to create an uncapped fundto pay for repairing roughly 4,500 properties, mostly in Florida,Louisiana, Mississippi and Alabama. A separate fund capped at $30million will pay for other types of losses, including those bypeople who blame drywall for health problems.

Russ Herman, a lead attorney for the plaintiffs, said thesettlement is worth between $800 million and $1 billion, althoughan attorney for the Chinese company disputed that estimate.

“We're very thankful for our clients,” Herman said. “What we'vegiven them, hopefully, is a happy holiday season.”

Knauf attorney Kerry Miller said the company “decided to step upand settle these claims and do the right thing.”

“They want to get this unfortunate incident behind them so theycan focus on manufacturing first-class building products,” hesaid.

Herman said around 55 percent of the people who would benefitfrom the settlement live in Florida, while roughly 35 percent livein Louisiana. The deal would resolve cases filed in both state andfederal court.

Chinese drywall was used in the construction of thousands ofhomes, mainly in the South, after a series of destructivehurricanes in 2005 and before the housing bubble burst. Theproblems it has caused range from a foul odor to corrosion of pipesand wiring.

Steven Roberts, a plaintiff who built a home in Boynton Beach,Fla., in 2005 with Knauf drywall, said the first sign of troublewas a foul odor that smelled like “bitter sulfur.” His familydidn't suspect a more serious problem until electrical appliancesstarted failing and corrosion formed on mirrors and bathroomfixtures.

Roberts, 37, a veterinarian, said he can't afford to repair allthe damage or move his wife and daughter out, so he hopes thesettlement can finally end their ordeal.

“It would be a huge weight lifted off our shoulders,” he said.“It's been extremely challenging for my wife, very stressful. It'sdefinitely a relief to potentially have the end in sight.”

Virginia homeowners also filed many claims over drywall damage,but Herman said few of them would benefit from the deal becausemost received their drywall from other Chinese companies thathaven't responded to lawsuits.

“They're the victims, innocent victims, of corporatemalfeasance,” Herman said. “To them we pledge, 'Keep the faith.'Our journey does not end here.”

Fallon must sign off on the settlement before any money isdistributed. Although the judge could give his preliminary approvalto the deal in January, it will likely take several more months formoney to reach homeowners.

Knauf agreed to initially deposit $200 million in the repairsfund, which would be replenished as needed. Greg Wallance, anattorney for the company, said Herman's estimate that the dealcould be worth up to $1 billion is “pure speculation.”

“It isn't going to be anything approaching that,” he said.

Attorneys' fees and costs paid by Knauf are capped at $160million and will not be deducted from homeowners' shares of thesettlement money.

New Orleans Saints head coach Sean Payton was one of theplaintiffs in the Knauf litigation. His attorney, Daniel BecnelJr., said Payton already has fixed the suburban New Orleans homehis family had to vacate. Knauf reimbursed him for the repairs.

Fallon presides over more than 10,000 claims involving Chinesedrywall. The cases were consolidated in the New Orleans federalcourt in 2009.

Thursday's settlement isn't the first, but it offers the most tohomeowners, so far. In June, plaintiffs reached a $55 millionsettlement with Banner Supply Co.—a Miami-based supplier of Chinesedrywall—along with several related companies and Banner'sinsurers.