Lumber Liquidators Plunges After ‘60 Minutes’ Formaldehyde Story
(Bloomberg) -- Lumber Liquidators Holdings Inc. shares plunged as much as 26 percent after a “60 Minutes” report accused the company of selling Chinese-made flooring with illegal levels of formaldehyde.
The stock sank as low as $38.19 in New York following the broadcast on CBS Sunday evening. The investigation, which used undercover reporters and hidden cameras, found that flooring was billed as meeting California health and safety standards even though it didn’t. Video showed managers at three Chinese factories admitting to using false labeling that made it look like the products met regulations.
“60 Minutes” also said it tested flooring from China that was being sold in several states outside of California, including Virginia, Florida, Texas and New York. Of the 31 products tested, only one would have been legal in California, the show found. The tests were used to back up similar claims made in lawsuits against Lumber Liquidators.
In a response to the allegations, Lumber Liquidators said Monday in a filing that “60 Minutes” used an improper test and that all its laminate floors are safe. The company has also contacted the Chinese suppliers included in the story and have confirmed that all products made for Lumber Liquidators have been compliant with California regulations.
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http://www.bloomberg.com/news/articles/2015-03-02/lumber-liquidators-sold-illegal-flooring-60-minutes-reports
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