TOANO, Va. - Retail flooring giant Lumber Liquidators has agreed to pay as much as $30 million to settle a lawsuit involving allegedly defective bamboo flooring.
The lawsuit was brought on by customers who said the retailer's Morning Star Strand Bamboo flooring was "subject to premature cracking, splitting, warping, and shrinking, all well before the warranted useful life." The 2014 suit has been named the "Gold litigation" after lead plaintiff Dana Gold.
Lumber Liquidators will pay $14 million in cash and $14 million in store-credit vouchers, and potentially $2 million more in vouchers. Per the agreement, the company does not have to admit fault or liability.
The $30 million settlement covers U.S. customers who bought - for personal, family or household use - Morning Star Strand Bamboo flooring from Jan. 1, 2012, to March 15, 2019. The settlement must be approved by a judge.
Lumber Liquidators said it believes that its cash flow from operations, together with existing liquidity sources, is sufficient to fund the settlement.
Last month, company founder Thomas D. Sullivan pushed for a private buyout, but then abruptly abandoned his efforts. Shares plunged 13 percent as a result.
The struggling 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. The company runs 416 locations around North America.
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