Lumber Liquidators (Toano, Va.) signed a memorandum of understanding to pay $22 million in cash and $14 million in store credit to settle all claims in two class action lawsuits related to the company’s Chinese-manufactured laminate flooring.
One lawsuit alleged the flooring emitted excessive amounts of formaldehyde, while the second lawsuit alleged issues with the flooring’s durability and abrasion ratings. The settlement does not include an admission of guilt by the company.
The memorandum must be approved by the court, the plaintiffs and the company’s board of directors before it can go into effect.
“We are pleased to have entered into this MOU, and welcome it as an important step toward resolving this legacy issue and moving forward,” said CEO Dennis Knowles in a statement.
The company still faces a number of individual claims, lawsuits and at least one class action lawsuit that allege excessive formaldehyde emissions and other damages.
Lumber Liquidators stock opened Wednesday morning at $37 after closing at $34.90 Tuesday before news of the settlement went public. The stock was trading at $35.95 at press time. The company’s third quarter results will be released Oct. 31.
