Lumber Liquidators to pay $10M settlement

Lumber Liquidators shares jumped Wednesday after the flooring company pleaded guilty to federal charges stemming from a 2013 investigation of its imports of flooring products.

The settlement with the Department of Justice is over its compliance with the Lacey Act, a conservation law regarding the protection of plants, fish and wildlife.

In March, a TV news magazine “60 Minutes” report alleged that Lumber Liquidators was selling Chinese-made laminates that contained higher-than-accepted levels of formaldehyde, a chemical known to cause cancer…

The lawsuit comes as another hurdle for the flooring company to clear in recent months.

“We are pleased to reach this agreement and resolve a legacy issue related to the Lacey Act”, he said. The settlement is different from the present California Air Resources Board (CARB) claims related to certain Lumber Liquidators products.

According to a release from the company, Lumber Liquidators cooperated with federal authorities and will pay the full penalty, including a $7.8 million fine, more than $1 million in community service contributions to the National Fish and Wildlife Foundation and the Rhinoceros and Tiger Conservation Fund, and a almost $1 million forfeiture payment.

Lumber Liquidators has 370 stores in 46 states.

The company said it reserved money for the payments in the first quarter of 2015. For the company to be guilty of these violations does not require that it had acted deliberately or with willful intent to violate the law, and Lumber Liquidators denies that it acted deliberately or with willful intent.

The hardwood floor company is slated to forfeit an additional $969,175, though the company has failed to specify who will receive the payment.

Lumber Liquidators said it will also implement an Environmental Compliance Plan.

During its investigation, the company determined that there were no compliance concerns with respect to approximately $0.9 million of the suspended engineered hardwood flooring. It was last up about 10 percent.