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CEO Quits Embattled Flooring Giant

Monday, May 25, 2015

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TOANO, VA—Lumber Liquidators Inc. president and CEO Robert M. Lynch has unexpectedly resigned his position, leaving greater turmoil at the company that is already the target of multiple investigations into its practices and products.

Lynch's departure, announced Thursday (May 21), was the second in three weeks for Lumber Liquidators, North America's largest specialty retailer of hardwood flooring.

Lumber Liquidators

Lumber Liquidators founder Tom Sullivan has taken over as acting CEO following the unexpected resignation of president and CEO Robert M. Lynch.

On April 29, the company announced that Chief Financial Officer Daniel E. Terrell would leave his post June 1.

Coming and Going

Company founder Thomas D. Sullivan will be acting CEO of the company as it conducts a nationwide search for Lynch's replacement, the company said.

As for Lynch, the statement said only that he had "unexpectedly notified" the company of his decision.

In announcing Terrell's departure last month, Lynch praised his "invaluable leadership and service to the company."

The company has appointed Gregory A. Whirley Jr., currently a senior manager with Ernst & Young LLP, as interim CFO.

Double Trouble

Lumber Liquidators is fighting battles on two fronts:

The hardwood investigation has been underway for several years; federal agents raided the company's headquarters in 2013.

Liquidating the Forests

A 2013 documentary by the nonprofit Environmental Investigation Agency accuses Lumber Liquidators of funneling illegally harvested Russian hardwood through China.

But the situation heated up this February when the company disclosed in a U.S. Securities and Exchange Commission filing that the Justice Department was "contemplating seeking criminal charges under the Lacey Act."

The act governs the trade of animals, plants and plant products, including those made from illegally logged woods.

Only weeks later, a CBS News 60 Minutes report spotlighted the laminate flooring issue.

The company has vigorously denied all wrongdoing, but its stock has plummeted by 68 percent this year, according to Bloomberg.

Hardwood Probe

The hardwood investigation focuses on the logging practices of Lumber Liquidators' Russian and Chinese suppliers and on the company's import practices.

A Washington, D.C., nonprofit called the Environmental Investigation Agency has been raising alarms about Lumber Liquidators' importing practices for several years. A 2013 documentary, Liquidating the Forests, details those claims.


The nonprofit Global Community Monitor is suing Lumber Liquidators, alleging toxic formaldehyde emissions from its Chinese-made laminate floors. The company's stock has plummeted.

Meanwhile, 60 Minutes built a case March 1 about excessive emissions of formaldehyde in Chinese-made laminate floors sold by Lumber Liquidators.

Emissions Fallout

The report included independent testing of flooring samples that showed excessive emissions in the Chinese-made products. Excessive emissions were not found in Lumber Liquidators' U.S.-made laminates, 60 Minutes said.

More than 100 million square feet of Lumber Liquidators' laminate flooring is installed in American homes each year, CBS reported.

Lumber Liquidators responded to the report by offering free emissions test kits to U.S. customers of the product.

The company also said it would commission additional third-party testing. On May 7, Lumber Liquidators announced that testing "by independent, accredited laboratories ... indicate that over 97% of customers' homes were within the protective guidelines established by the World Health Organization for formaldehyde levels in indoor air."


Tagged categories: Asia Pacific; Construction chemicals; EMEA (Europe, Middle East and Africa); Emissions; Flooring system; Good Technical Practice; Hardwood; Health and safety; Indoor air quality; Latin America; Laws and litigation; Lawsuits; North America; Wood composites

Comment from Gregory Stoner, (5/26/2015, 6:12 AM)

So Mr.Math deduces that three million square feet was lumber that exceeded the chemical threshold That is a lot of flooring to replace.

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