TOANO, Va. - It appears that Lumber Liquidators has settled its legal dispute with its founder and former CEO Tom Sullivan's company, Cabinets To Go.
 
In March, Lumber Liquidators had claimed Cabinets To Go, a specialy retailer of kitchen cabinets founded by Sullivan in 2008, reneged on a 2010 agreeement that forbid competition between the two companies for at least 10 years. That meant not selling wood floors for that period. 
 
But in 2019 - just nine years after the agreement - Liquidators claimed Cabinets To Go had begun selling wood flooring.
 
“Despite this clear and enforceable covenant between two sophisticated business entities, CTG is now selling hardwood flooring products both in e-commerce and in retail stores, many of which CTG has located adjacent to Lumber Liquidators stores," the lawsuit stated.
 
Lumber Liquidators sought $10 million and a permanent junction forbidding Cabinets To Go to sell wood flooring. Sullivan and Cabinets To Go called for the lawsuit to be dismissed.
 
A settlement has been reached. Terms of the settlement were not disclosed publicly, although Cabinets To Go continues to sell flooring, at least according to its website.
 
Neither company has returned comments to press.
 
History is complicated between the two companies. Early September, Sullivan, who founded Lumber Liquidators in 1994 and was board chairman up through May 2015, pushed the board to consider a buyout or a merger with Cabinets To Go. Sullivan urged the company to "explore strategic options" and to seek a private buyout, as he believed a takeover represented the best chance to turn the struggling retailer around.
 
Sullivan soon gave up. Sullivan told Bloomberg that although he will continue to monitor the situation, Lumber Liquidators' share price was now too high to consider a bid. Later in September, he sold nearly 80 percent of his company investments, or around 1.75 million shares. Sullivan had purchased 500,000 additional shares in early September.
 
Sullivan isn't happy with how Lumber Liquidators is being run. In an interview with Bloomberg, he called the board "pathetic" and said "they are spending money like crazy."
 
Lumber Liquidators may still turn around, but analysts expect it to take some time if it does. The company cut its outlook for the year last month, reported Bloomberg, citing uncertainty about tariffs and fewer customers.
 
Cabinets To Go, retails kitchen cabinets, flooring, countertops, and installation services. Its operations include a 400,000-square-foot distribution facility in Lawrenceburg, Tennessee and more than 60 showrooms nationwide. Sullivan founded the company in 2008.
 
 

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