May 21, 2015 — Lumber Liquidators said today that CEO Robert Lynch has “unexpectedly” resigned, just weeks after the company stopped selling Chinese-made laminated wood products that might contain toxic levels of formaldehyde.
In a statement, the company said founder Thomas Sullivan would step in to serve as acting CEO, and John Presley had been appointed as a non-executive chairman of the board of directors.
Lumber Liquidators has opened a “nationwide” search for a replacement CEO. No further details were provided when asked by the Associated Press.
Less than three months ago, 60 Minutes aired an investigative report accusing Lumber Liquidators of boosting profits by selling Chinese laminate floors that contained massive amounts of formaldehyde, a carcinogenic chemical used to bind together sawdust particles in the core of the board.
Investigators also went to China, where they recorded employees admit that products were mislabeled as compliant with formaldehyde emissions limits set by the California Air Resources Board (CARB).
Lumber Liquidators has been steadfast in its defense of the flooring, but fallout among consumers and investors has been devastating. After shedding another 16% today, the stock is down by 70% since a high of $68 just before the 60 Minutes report aired on March 1.
No recalls have been issued, but Lumber Liquidators did announce earlier this month that they would stop selling Chinese laminate flooring. Meanwhile, the Justice Department is pursuing criminal charges against the company for violating the Lacey Act by selling wood that was illegally harvested from Russia’s far east, home of the endangered Siberian tiger.