Lawyers representing a trust fund for retired police officers and firefighters from a small city near Miami have filed a class-action lawsuit against Lumber Liquidators, alleging actions by the Toano-based company have caused the fund to lose money.
The suit, filed in federal court Sept. 17 on behalf of the Hallandale Beach Police Officers’ and Firefighters’ Personnel Retirement Trust, is the second filed on behalf of shareholders of the company. It follows a class-action suit filed Nov. 26 on behalf of a single shareholder, Gregg Kiken, and anyone else who purchased stock in the company.
Lumber Liquidators has in the last year fielded five lawsuits — two of which have been dismissed — from customers and shareholders following a September 2013 raid by federal agents of the corporate headquarters in Toano and a storefront in Henrico County.
The lawsuits have also included allegations the company had sourced lumber products from the habitat of the endangered Siberian Tiger and the company sold wood products containing elevated levels of formaldehyde.
The Hallandale Beach suit also alleges the company repeatedly said its supply network was diverse enough to meet customer demand without affecting revenue and that its work to source lumber would boost revenue and lead to a wider profit margin, according to the complaint in that case. It alleges the company’s stock traded at artificially inflated prices because of those sentiments and that when “poor financial results” were announced by company officials in July, the Hallandale Beach fund lost money.
The filing of the Hallandale Beach suit has touched off a back-and-forth between lawyers representing the trust fund and lawyers representing Kiken’s case, as the two are competing to have first dibs on having their cases target actions by the company for a window running from November 2013 through July 9, the day the financial results the Hallandale Beach lawyers characterized as “poor” were released.
Lumber Liquidators released a disclosure that day saying the company’s profit margin would shrink due to several factors, including problems with inventory levels, increased costs and adverse shifts in sales. In that disclosure, the company’s projections for 2014 sales decreased by $100 million.
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Lumber Liquidators lawsuit timeline:
Nov. 26: Shareholder Gregg Kiken files class-action suit on behalf of shareholders who purchased stock between February and November 2013 alleging losses due to company activities. Active.
Dec. 3: Three customers file a class-action suit on behalf of all other customers who bought wood products from Lumber Liquidators that were sourced in China. Dismissed.
Jan. 14: Three customers file class-action suit on behalf of all other customers in Virginia, New York and Alabama who bought wood products from Lumber Liquidators that were sourced in China. Dismissed.
July 23: California-based Global Community monitor files suit seeking penalties against Lumber Liquidators for wood it alleges was sold despite elevated levels of formaldehyde. Active.
Sept. 17: Lawyers representing a Southern Florida retirement trust file a class-action suit on behalf of the trust, alleging losses due to company activities. Active.
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“In certain key merchandise categories, primarily laminates, vinyl plank and engineered hardwoods, lower than planned inventory levels reduced our ability to convert customer interest into invoiced sales,” Lumber Liquidators President and CEO Robert Lynch said in a news release about the July 9 disclosure. “Certain mills experienced production delays in meeting our open orders as we continued to enhance our quality assurance requirements.”
On July 10, the company’s stock price dropped 21.5 percent, from $70.42 to $55.25.
The Kiken case initially targeted actions between February 22, 2013, and Nov. 22, 2013, though on Sept. 17, its lawyers filed a motion seeking an extension to July 9. The same day, the Hallandale Beach case was filed, and within a week, the Hallandale Beach lawyers filed a motion in opposition to the Kiken request to extend the window.
In that memorandum, the Hallandale Beach lawyers accuse the Kiken lawyers of a “desire to assert control over any Lumber Liquidators related litigation.” The Hallandale beach lawyers have also filed a memorandum to intervene in the Kiken suit, which, if approved, would allow them a chance to argue that the resolution of the Kiken suit would negatively affect their case.
Lawyers for Lumber Liquidators are required to respond to the Hallandale Beach complaint by Oct. 17, while the judge in the Kiken is scheduled to respond by Oct. 24 to the motion to extend the window of that case, according to federal court records.
When contacted Monday for comment, Lumber Liquidators said in a statement it “does not comment on pending or in-progress litigation of this nature.”
Related Coverage:
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- Customer Lawsuit Against Lumber Liquidators Dismissed
- One of Three Lawsuits Against Lumber Liquidators Dropped
- Lumber Liquidators Served with Third Class-Action Lawsuit
- Toano’s Lumber Liquidators Announces Expansion Plans
- Customers File Class-Action Lawsuit Against Lumber Liquidators
- Class Action Lawsuit Against Lumber Liquidators Seeks Damages for Shareholders
- Expert: Illegal Loggers Target Siberian Tiger Habitat for Proximity to Manufacturers
- Federal Agents Search Lumber Liquidators Headquarters in Toano
