Lumber Liquidators CEO Exits ‘Unexpectedly,’ Stock Plummets

Lumber Liquidators, under two federal investigations over its sourcing practices and the level of formaldehyde in its Chinese-made laminate flooring, said May 21 that its president and CEO Robert Lynch resigned “unexpectedly” from his post and board position.

Until a replacement is found, Thomas Sullivan, the company’s founder, will serve as acting CEO, and John Presley, the company’s lead independent director, will fill in as non-executive chairman of the board of directors.

The company’s stock price sank 16 percent to $21.20 at 9:11 a.m. following the announcement and dipped as low as $20.92, according to Bloomberg. Company stock had not dipped below $22 since March 2014. The stock at the end of the day May 26 was $22.03.

Lynch’s resignation is the latest chapter in a drama that started with a 2013 report from the Environmental Investigation Agency alleging the company’s wood products were sourced from illegally logged forests in Siberian tiger habitat. Federal agents subsequently raided the company’s headquarters in Toano, Va. This year, the company said the Department of Justice will seek criminal charges under the Lacey Act.

A second federal investigation, led by the Consumer Protection Safety Commission, began after “60 Minutes,” working on a tip from a financial analyst short-selling Lumber Liquidators stock, found elevated levels of formaldehyde in the company’s Chinese-made laminate.

More than 100 lawsuits have been filed against the company over the safety of its products since the episode aired. Lumber Liquidators’ insurers sued the company in order to deny coverage for the company’s losses from the lawsuits. The company countersued.

The company announced in late April that CFO Daniel Terrell would leave his post in June.

Page 1 of 796
Next Page
Resource Book
Looking for a specific product or a company? Wood Floor Business has the only comprehensive database of the industry.
Learn More
Resource Book
Podcasts
All Things Wood Floor, created by Wood Floor Business magazine, talks to interesting wood flooring pros to share knowledge, stories and tips on everything to do with wood flooring, from installation, sanding and finishing to business management.
Learn More
Podcasts