Lumber Liquidators Holdings Inc (NYSE:LL) shares dropped more than 15% on Thursday after the company’s CEO, Robert Lynch resigned unexpectedly.
Upon his untimely exit, the company’s founder Thomas Sullivan was selected as the ad hoc CEO. Following the new changes, Sullivan released a statement where he expressed his gratitude and pride in the team. He also said that he was happy and looked forward to working with them to provide better hardwood floor service to the clients.
Lynch’s exit resulted in a few more changes. John Presley was appointed as the new non-executive chairman. He previously occupied the position of lead independent director. Lynch did not provide any statement about his resignation.
He left the company in a bit of turmoil after a lot of controversy regarding its Chinese laminate floor products. The allegations are heavily implicating leaving the firm on the edge. They include claims that the laminate product contains dangerous chemical called formaldehyde. The allegations have been damning as Lumber Liquidators had to be subjected to inspection.
Lumber Liquidators denied all the accusations. The company also suspended all the laminate imports from China. Further investigations enforced by the U.S government ensued, forcing the company to employ even harsher tactics. These investigations made the company result to shutting down all the laminate import processes from all its other sources.
The justice department probed the situation and worked hard to bring up criminal charges through the Lacey Act. The act prohibits the use of illegally acquired wood material. Regardless of the allegations, the company maintained its innocence.
The firm has been carrying out test reviews over 2600 homes where the imported laminate has been imported. Lumber Liquidators Holdings Inc (NYSE:LL) maintains that these tests prove that its materials have not been contaminated.
Regardless, the firm has been facing some harsh times, and they have been affecting its performance in the share index. The share fluctuation to 15% is largely influenced by the contamination allegations.