Lumber Liquidators—the largest flooring retailer in North America—is under fire for selling Chinese-made laminate hardwood with unacceptably high levels of formaldehyde, a known cancer-causing chemical.
"More than 100 million square feet of the company's cheaper laminate flooring is installed in American homes every year," according to an episode on CBS' "60 Minutes" broadcast March 1. The retailer produces much of its laminate flooring in China, the broadcast said.
Chinese-made laminate flooring purchased in six states was tested and found to be out of compliance with standards set by the California Air Resources Board (CARB). Those CARB standards for formaldehyde emissions in wood flooring have been adopted by Congress and will take effect nationwide this year.
CNBC reports that trading of Lumber Liquidators stock has been halted Monday morning after its shares fell more than 20%.
"These attacks are driven by a small group of short-selling investors who are working together for the sole purpose of making money by lowering our stock price," Lumber Liquidators said in a statement.
Here's an small excerpt from the the interview between "60 Minutes" correspondent Anderson Cooper and Lumber Liquidators' founder and chairman, Tom Sullivan.
TS: It's not a real world test of the laminate--it's not the way it's used.
AC: You say you don't believe in this test, but what you believe doesn't really matter. It's what CARB believes. And they believe in this test.
TS: We will do whatever the regulations are.
AC: I just don't understand how a group can do tests on your Chinese-made laminates and every single one of those failed to meet the emissions standards.
TS: People have different reasons for this test. This is a group of lawyers who are suing us, selling short on our stock.
View the full "60 Minutes" transcript here and feel free to sound off in the comments below.