ATLANTA - Lumber Liquidators Holdings Inc. inflated its earnings during a 21-month period by importing illegally sourced lumber, a class action lawsuit filed today alleges.
The lawsuit was filed by Holzer Holzer & Fistel LLC in the U.S. District Court for the Eastern District of Virginia on behalf of investors who purchased Lumber Liquidators securities between Feb. 22, 2012 and Nov. 21, 2013. The complaint alleges that a series of statements regarding Lumber Liquidators' business, operations and prospects were false and misleading.
Lumber Liquidators' headquarters in Tonoa, VA, and a retail outlet in Richmond, VA, were raided by agents of the Immigration and Customs Enforcement and Homeland Security Investigations on Sept. 26.
In a 64-page report, "Liquidating the Forests," by the London-based Environmental Investigation Agency (EIA) alleges that Lumber Liquidators' Chinese wood suppliers may have mixed illegally harvested Siberian lumber into its supply chain, a violation of the U.S. Lacey Act, which was amended in 2008 to ban the import of illegally harvested wood. The company has said that it has not knowingly done anything wrong.
Holzer & Holzer said it was weighing the possibility of expanding the time frame of the lawsuit until Dec. 9, the day Lumber Liquidators forecast its fourth quarter earnings.
Lumber Liquidators said it opened 29 or 30 new new stores in 2013 and expects to end this year with net sales in the range of $994 million to $1.0 billion, up from a previous range of $985 million to $995 million. The company forecasts net sales between $1.15 billion and $1.20 billion in 2014. It also plans to open 30 to 40 new store locations and remodel 25 to 35 existing stores, all in the expanded showroom format.
With more than 315 retail outlets, Lumber Liquidators is North America's largest specialty retailer of hardwood flooring.
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