Lumber Liquidators CEO quits unexpectedly

New York – Robert Lynch, CEO of embattled Lumber Liquidators Holdings, has unexpectedly resigned as the Justice Department seeks to file criminal charges for the company’s allegedly selling Chinese hardwood laminate products that had illegal levels of formaldehyde. In a brief statement, Lumber Liquidators gave no reason for Lynch’s departure.



Lynch also resigned as a director of the company. Lumber Liquidators will commence a national search for Lynch's replacement. In the interim, Thomas D. Sullivan, the company's founder, will serve as the acting CEO. John M. Presley, lead independent director, has been appointed as non-executive chairman of the board of directors. Lynch had held the CEO position since 2012.



The Justice Department investigation was first revealed in a CBS “60 Minutes” expose in early March, alleging that the company’s laminate flooring made in China contained high levels of formaldehyde. Lumber Liquidators maintains that it complies with applicable regulations for its products, including California standards for formaldehyde emissions. It has sent thousands of free air testing kits to customers who bought the flooring and says that 97% of the products tested fell within World Health Organization standards for formaldehyde.



At least for the time being, Lumber Liquidators is not sourcing flooring products from China. Lumber Liquidators recently reported a first-quarter loss of $7.8 million, swinging from a profit of $13.7 million in the year-ago period and missing Wall Street expectations. The company is also facing hundreds of class-action lawsuits. CFO Dan Terrell previously announced he would step down in June.