Lumber Liquidators (Toano, Va.) will receive $100,000 as part of the final resolution of the “Proposition 65 lawsuit,” according to a filing with the SEC.
Lumber Liquidators (Toano, Va.) will receive $100,000 as part of the final resolution of the “Proposition 65 lawsuit,” according to a filing with the SEC.
The plaintiffs, Global Community Monitor and Sunshine Park LLC, must pay the fine in order to reimburse Lumber Liquidators for the costs associated with the lawsuit they filed in July 2014. The plaintiffs also must surrender their right to appeal or cancel the judgement.
“The verdict in our favor in the Proposition 65 case and the related settlement requiring plaintiffs to reimburse our costs are additional steps forward in the tremendous progress our company has made over the past several months,” said John Presley, CEO of Lumber Liquidators, in a statement. “We have strengthened Lumber Liquidators across every area of our organization, including implementing significant enhancements to our sourcing and compliance practices, and look forward to continuing to deliver products that are compliant with California's environmental standards.”
The plaintiff’s lawsuit alleged Lumber Liquidators sold laminate flooring from China in California that emitted high levels of formaldehyde and would have required a label, as per Proposition 65. The lawsuit formed the basis for the “60 Minutes” investigation into the company’s Chinese-made laminate flooring that aired in March 2015.
The investigation triggered a freefall in the company’s stock value. It was trading as high as $69.22 in late February before the investigation aired and bottomed out at $11.07 on May 10, 2016. News of the final resolution in the Proposition 65 case increased Lumber Liquidators stock 7 percent to $17.45 in after-hours trading on Tuesday, according to Reuters.