WASHINGTON - Hardwood flooring giant has paid regulators $33 million to settle its formaldehyde flooring scandal.
In October, Lumber Liquidators agreed to contribute $22 million in cash and provide $14 million in-store-credit vouchers for a total of $36 million to settle all claims brought on behalf of purchasers of the Chinese-manufactured laminate flooring it sold between January 1, 2009 and May 31, 2015.
“We have cooperated with this investigation and are pleased to have reached a resolution with the U.S. Attorney’s Office, DOJ, and SEC,” Lumber Liquidators Chief Executive Officer Dennis Knowles said in a statement.
The lawsuit was filed on behalf of 760,000 customers who bought the company's Chinese-made laminate flooring between 2009 and 2015. The plaintiffs are largely homeowners who began ripping out their floors after CBS News 60 Minutes program did an expose on the flooring. Reporters interviewed managers of factories in China who were producing laminate flooring with glues containing formaldehyde, then packaging it boxes labeled as CARB compliant - erroneously indicating it met California Air Resource Board requirements for minimal formaldehyde contents.
The scandal brought down the CEO and other executives at Lumber Liquidators, and its stock price and sales and share prices fell precipitously. The revelations also led the Environmental Protection Agency to issue standards on formaldehyde in panels.
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