May 21, 2015 — Less than three months after being accused of selling formaldehyde-ridden laminate flooring from China, Lumber Liquidators said that CEO Robert Lynch has “unexpectedly” resigned.
The company has opened a nationwide search for a replacement.
In the meantime, company founder Thomas Sullivan has stepped in to serve as acting CEO. John Presley, the company’s lead independent director, has been appointed as a non-executive chairman of the board of directors, according to a statement issued today.
Lumber Liquidators provided no further details when asked by the Associated Press.
The announcement sent the company’s stock price falling by more than 15% to just over $21, down about 70% from the end of February. On March 1, investors who are short-selling the stock (betting it will go down) were featured on a 60 Minutes report that brought formaldehyde allegations mainstream.
Lumber Liquidators is accused of selling Chinese-made laminated wood flooring that contains dangerously high levels of formaldehyde, a cancer-causing chemical that is used in cheap glues in the core of the board. Over time, formaldehyde “off-gassing” can become a significant source of toxic chemical exposure in the home.
Investigators with 60 Minutes also accused Lumber Liquidators of saving up to 15% on the price of flooring by boosting the amount of formaldehyde and mislabeling it as compliant with laws limiting formaldehyde emissions.
Earlier this month, Lumber Liquidators said it would stop selling all laminate flooring made in China, but did not issue any recalls or stop defending the safety of the flooring. The company also disclosed that the Justice Department is seeking criminal charges for violating the Lacey Act by selling illegally-harvested wood products.