LL Flooring is going out of business after the bankrupt company failed to find a buyer that could keep the chain afloat.
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LL Flooring is going out of business after the bankrupt company failed to find a buyer that could keep the chain afloat.
As a result, the company will begin “winding down operations” next week at its remaining 200 stores across the country. Over the next 12 weeks, LL Flooring will close all of its stores and lay off nearly 2,000 employees, the company said in a statement.
The company filed for Chapter 11 bankruptcy at the beginning of August, initiating closing sales at 94 stores and kickstarting a search for a buyer.
LL Flooring stated Aug. 11 that it was in “active negotiations with multiple bidders” to sell the business.
However, in a recent letter to customers, CEO Charles Tyson said, “We have actively negotiated with multiple bidders, but these discussions have not resulted in an offer, with the necessary financing, that would maximize the value of LL Flooring.”
The company said in a letter to vendors a Chapter 11 filing requires a company to receive the highest or best offer for the business or assets. “In our case, it was determined that a sale of the Company’s individual assets, holding closing sales at our stores and winding down the business will deliver the most value to our creditors,” the letter stated.
Flooring orders will be fulfilled within 30 days, but after Sept. 6, new installation appointments will stop, the company said.
“This is not the outcome that any of us had hoped for,” Tyson said in the customer letter.
Before filing for bankruptcy, the company received numerous offers to purchase the company, including two offers from founder and former CEO Tom Sullivan.
In May 2023, Sullivan’s firm, F9 Investments, made a bid to buy the company for $5.76 per share, but LL Flooring’s board rejected it, claiming it undervalued the company. Sullivan’s firm made a second bid in November for $3.00 per share.
The company received another takeover offer from Live Ventures Incorporated in May 2024 to acquire the company at $2.50 a share.
The company's troubled history dates to 2015, when a "60 Minutes" investigation reported that the company’s laminate made in China had levels of formaldehyde that was as much as 13 times over the legal limit set by the California Air Resources Board (CARB).
In 2018, the company paid a $36 million settlement in a class-action lawsuit filed on behalf of 760,000 customers who purchased the company’s Chinese-made laminate flooring between 2009 and 2015.
Then in 2019, the company agreed to pay a $33 million settlement with federal and state governments after being charged with securities fraud for misleading investors about its Chinese-made laminate flooring’s formaldehyde levels in 2015. Later that year, the company agreed to pay $30 million in a class-action lawsuit over claims that its Morning Star Strand Bamboo flooring was defective.
In 2021, the company rebranded from “Lumber Liquidators” to “LL Flooring.”
