MAY 21, 2015
U.S. Standards
Lumber
Liquidators Holdings Inc., under federal investigation over allegations
that it sold toxic flooring, said Chief Executive Officer Robert Lynch
unexpectedly resigned from his post.
Company
founder Thomas Sullivan is serving as CEO during the search for a
permanent replacement, Toano, Virginia-based Lumber Liquidators said
Thursday in a statement. Lynch also stepped down from the board, and
John Presley, the company’s lead independent director, will become
nonexecutive chairman.
Lumber
Liquidators is trying to win back customers after “60 Minutes” reported
in March that said it sold Chinese-produced laminate flooring with
toxic levels of formaldehyde, a known carcinogen. While the company
assured consumers its products are safe, sales have slid and the U.S.
Consumer Product Safety Commission is probing the allegations.
John Feld, a spokesman for Lumber Liquidators, declined to comment beyond the statement.
The
shares tumbled as much as 17 percent to $20.92 in New York. Lumber
Liquidators had already slid 62 percent this year through Wednesday.
Lumber
Liquidators earlier this month suspended sales of laminate made in
China and said a special board committee, with help from former FBI
director Louis Freeh’s consulting firm, was reviewing its suppliers in
the country.
The
company said then that its Chinese suppliers had certified and labeled
the flooring as compliant with standards in the U.S. When asked if the
company was still willing to say its products are safe, a company
spokesman declined to comment beyond the statement.
The
“60 Minutes” report, prompted by research from investors who were
betting against Lumber Liquidators stock, has rippled throughout the
flooring industry. Home-improvement retailer Lowe’s Inc. earlier this
month stopped selling a line of Chinese-made laminate flooring after one
of Lumber Liquidators’ critics raised questions about the brand’s
safety.