Lumber Liquidators CEO Robert Lynch resigns
Lumber Liquidators CEO Robert Lynch resigned while the company continues to be investigated over products imported from China. The company earlier this month said it stopped selling all laminate flooring made in China after disclosing that the Justice Department is seeking criminal charges.
Lumber Liquidators CEO Robert Lynch has abruptly quit the company that is embroiled in an investigation over products imported from China.
Shares tumbled more than 16 percent in premarket trading Thursday.
The company said Lynch resigned "unexpectedly" but did not give a reason for his departure.
The company earlier this month said that it had suspended the sale of all laminate flooring made in China after disclosing that the Justice Department is seeking criminal charges against it. At the time Lumber Liquidators said that it decided to suspend the sales while a board committee completes a review of its sourcing compliance program.
The CBS news show "60 Minutes" first reported in March that the Chinese-made laminate flooring contained high levels of the carcinogen formaldehyde. Formaldehyde is commonly found in industrial products, but it's considered a carcinogen at high levels of exposure, and regulations limit the amount used in consumer products, according to USA Today. The 60 Minutes report claims three Chinese suppliers falsely labeled their products as being compliant to the exposure limit set in California.
Lumber Liquidators has sent thousands of free air testing kits to customers since early March. It has said that more than 97 percent of the kits from customers with laminate flooring from China showed formaldehyde air concentrations that fell within World Health Organization guidelines.
The company has said that it has stopped buying Chinese laminate flooring for now, opting instead for products from parts of Europe and North America.
Lynch, who also served as president and a director, was in the CEO position since January 2012, according to CapitalIQ.
Lumber Liquidators Holdings Inc. said that its founder, Thomas Sullivan, will take over as acting CEO while the Toano, Virginia-based company searches for a replacement.
"I am really proud of the LL Team and I look forward to working with them and providing our customers with the best hardwood floors at the best prices as we have since I founded the Company over 20 years ago," Sullivan said in a release.
The company also announced that lead independent director John Presley was named nonexecutive chairman.
Its stock fell $4.25 to $21.02 before the market opened.