Lumber Liquidators is suing its founder and former chairman Tom Sullivan’s Cabinets To Go company for $10 million in damages, alleging the company is selling hardwood flooring in violation of an agreement, Richmond BizSense reports.
Sullivan formed Cabinets To Go in 2008 while still chairman of Lumber Liquidators. In 2010, the two companies formed a memorandum of understanding in which Cabinets To Go agreed not to compete with Lumber Liquidators directly for 10 years, according to the report.
Cabinets To Go is calling for the lawsuit to be dismissed, claiming the MOU is “defunct” and violates antitrust laws. The lawsuit has been transferred to Richmond federal court.
Along with at least $10 million in damages, Lumber Liquidators is also seeking an order to permanently bar Cabinets To Go from selling hardwood flooring.
Cabinets To Go announced plans for a $6.5 million flooring plant expansion in Lawrenceburg, Tenn., in December 2017. It currently has 60 retail locations, according to BizSense.
Sullivan, who founded Lumber Liquidators in 1994, served as its board chairman from 1994–2015. He resigned from the board of directors in January 2017 after the company eliminated his position as an employee and made him a non-employee director on the board.