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Lumber Liquidators' next big fight is with its insurers
(LumberLiquidators.com)
Lumber Liquidators' next big fight is with insurers.
Some of its insurers are refusing to defend the company in multiple class action lawsuits. In turn, the company has taken nine insurance companies to court.
In an April 27 court filing in Wisconsin, first reported by the New York Post, the company claims that the nine companies are breaching 9 contracts to defend the company.
Lumber Liquidators is facing over 100 class action lawsuits from customers related to its laminate flooring.
What this disagreement with insurers means is that the company may have to cover the costs of the lawsuits that have been brought against it since March 1. This could run into the tens of millions of dollars, according to the Post.
In a statement to Business Insider, the company said: "Lumber Liquidators obtained liability insurance that promised to cover it if it found itself involved in litigation, but Lumber Liquidators' insurers are arguing that some of the fine print in those policies lets them off the hook. Lumber Liquidators is asking the court to make these insurers live up to their promises."
"This is a dispute about language and how it is interpreted; it's not that unusual with insurers," a spokesperson said.
The company's shares fell about 4% on Tuesday.
Shares are down 59% year-to-date. The March 1 episode of CBS' "60 Minutes" presented evidence, through tests, that the company's laminate flooring sourced in China contained excessive levels of formaldehyde.
The company said the testing methods were improper.
And amid investigations by the Consumer Product Safety Commission and the Department of Justice, the company halted sales of the controversial flooring last week.
(Google Finance)
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