Story on Lumber Liquidators

[Mike Henderson]

Looks like Lumber Liquidators got caught selling flooring with high formaldehyde levels - story here (http://www.marketwatch.com/story/lumber-liquidators-stock-slammed-by-60-minutes-report-2015-03-02?siteid=bnbh).

Mike

[Malcolm Schweizer]

To be fair, their name is "Lumber Liquidators." They just failed to mention is that the "liquid" is formaldehyde. :')

[Mike Henderson]

If I recall their story correctly, they started as a liquidator of left over lots of flooring, and were successful. The problem was that they may not have had enough of the flooring you liked to meet your project, and if you came up short, you were out of luck because there wasn't any more. But as long as you knew the limitations, the price was right.

But as they grew, there wasn't enough left over lots of flooring to meet their growth so they started buying new flooring, just like every other flooring supplier. But when you're buying new, you're the same as every other flooring retailer. To get a price advantage, it looks like they started buying cheap flooring from China that had high levels of formaldehyde, and allowed them to maintain their price advantage.

By the time they finish paying for the replacement of the flooring they already sold, and write off all of their inventory, plus pay the lawyers and penalties - and maybe face criminal prosecution, they'll probably file for bankruptcy. Good riddance!

Mike

[ryan paulsen]

I think the best part of this story is the advertisement on my screen that the auto-bot added to this post is for LL

"As flooring experts we care too much to sell anything but the SAFEST AND HIGHEST QUALITY FLOORING"

[Brian Tymchak]

I saw the 60 minutes report last night. If LL is knowingly selling unsafe products, they deserve all they get. The part of the story that I raised my eyebrow over is that the group backing the lawsuit is a bunch of Wall Street short-sellers. Sure seems like a conflict of interest to take a position on a stock and then file a lawsuit that will knowingly impact the stock price. Wonder if the SEC will look at that..

[Larry Browning]

My understanding is that it is limited to the laminate flooring and not the hardwood flooring they sell. Is that correct?

[Mike Henderson]

I saw the 60 minutes report last night. If LL is knowingly selling unsafe products, they deserve all they get. The part of the story that I raised my eyebrow over is that the group backing the lawsuit is a bunch of Wall Street short-sellers. Sure seems like a conflict of interest to take a position on a stock and then file a lawsuit that will knowingly impact the stock price. Wonder if the SEC will look at that..
Actually, I have no problem with a bunch of short sellers pushing this issue. It looks to me like some of them recognized that the profit margin of LL was significantly higher than their competitors - and that business is a commodity business where it's pretty tough for one supplier to be a lot more profitable than others. They then asked "Why is LL doing better?" and started investigating - maybe bought some samples of the product and had it analyzed. Based on what they found, they short sold the company.

That kind of economic incentive and risk taking is good for all of us. Otherwise, we'd have to depend on some government agency discovering the problem, testing the product, and bringing a charge (either civil or criminal) against the company.

Mike

[Judson Green]

My understanding is that it is limited to the laminate flooring and not the hardwood flooring they sell. Is that correct?

Probably not anyway to get formaldehyde in a true hardwood flooring product, doubt the finish -if prefinished- would have any.

[Phil Thien]

Actually, I have no problem with a bunch of short sellers pushing this issue.

I'm guessing this will be the new paradigm in standards compliance.

Not a terribly efficient one. After all, when the dust settles, the short-sellers will be enriched, LL may be gone, and the homeowners will be left holding the bag.

OTOH, the homeowners could have chosen materials made in the US at a price premium. No guarantee the same thing wouldn't happen, but it seems far less likely to me.

The old "you get what you pay for" adage proven once again.

[Mike Henderson]

I'm guessing this will be the new paradigm in standards compliance.

Not a terribly efficient one. After all, when the dust settles, the short-sellers will be enriched, LL may be gone, and the homeowners will be left holding the bag.

OTOH, the homeowners could have chosen materials made in the US at a price premium. No guarantee the same thing wouldn't happen, but it seems far less likely to me.

The old "you get what you pay for" adage proven once again.
I'm of the opposite opinion. Having private individuals searching for non-compliance in the hope of making some money is not bad. The alternative is to provide additional funding through taxes to accomplish the same result. And if you want private individuals to ferret out such things, there has to be some money in it for the people who do the work. Compared to funding a much larger governmental organization to achieve the same purpose, I think it's quite efficient. The problem with a governmental organization is that you don't know where the next episode of "cheating" is going to be so you'd have to have a lot of big organizations looking for cheating. Private individuals only put money into places where they believe there will be a return.

LL still has value and resources. Even if they file for bankruptcy, the claims (almost certainly a class action) will be part of the bankruptcy - similar to the asbestos litigation - a lot of companies went bankrupt in that one, but there was a fund to compensate the victims. I expect a similar situation with LL. Their resources will be used to create a fund to compensate the people who bought the material. They may not get 100% but they'll get something.

But as you point out, they would not be in that situation if they had bought from a reputable retailer.

Mike

[Phil Thien]

I'm of the opposite opinion. Having private individuals searching for non-compliance in the hope of making some money is not bad. The alternative is to provide additional funding through taxes to accomplish the same result. And if you want private individuals to ferret out such things, there has to be some money in it for the people who do the work. Compared to funding a much larger governmental organization to achieve the same purpose, I think it's quite efficient. The problem with a governmental organization is that you don't know where the next episode of "cheating" is going to be so you'd have to have a lot of big organizations looking for cheating. Private individuals only put money into places where they believe there will be a return.

LL still has value and resources. Even if they file for bankruptcy, the claims (almost certainly a class action) will be part of the bankruptcy - similar to the asbestos litigation - a lot of companies went bankrupt in that one, but there was a fund to compensate the victims. I expect a similar situation with LL. Their resources will be used to create a fund to compensate the people who bought the material. They may not get 100% but they'll get something.

But as you point out, they would not be in that situation if they had bought from a reputable retailer.

Mike

I wasn't disagreeing, I was just pointing-out that in this scenario, the homeowners will take the hit.

LL likely doesn't have anywhere near the sort of resources that producers of asbestos did. There were over 100 companies that went bankrupt where assets were turned over to that trust.

Again, not disagreeing that the method is acceptable. But the takeaway is that the homeowner must be vigilant.

[Scott Shepherd]

Just wait until they have to comply with all the regulations in China that we do here. Your cheap Chinese made products, across the board, won't be so cheap any more.

They have a disregard for doing the right thing over there, from this issue to lead in paint for kids toys to food issues, it's not something new, that's how they operate at the low end of the market. If you want top tier products, they have them to, but for the price you pay for that, you can certainly make it here.

Someone on this forum visited China to look for products and they went to a place that cut granite, etc, and I think he said there were people working with no masks, or little masks at all. Who works in a granite cutting factory with no masks? My guess is they don't live to see their 40's or 50's much from that factory floor. But hey, we get cheap granite from it, so it much be okay, right?

[Brian Elfert]

The prices of having stuff made in China is starting to go up because workers are demanding better pay and better working conditions. In some of the larger Chinese cities they are starting to realize just how much pollution lax regulations is causing. Some companies are moving production back to the USA or not going to China at all because the cost difference isn't as great anymore. Turnaround times in the USA are much faster in most cases. Some companies that manufacture in the USA want to buy all their parts in the USA if they can. There is some hardware that nobody makes in the USA anymore. It has to be bought overseas unless someone wants to have a custom order done at high cost.

I read something recently that there are basically no tanneries left in the USA. The environmental regulations here cost too much to comply with. Animals are killed here and their hides are sent overseas for tanning and then back here to be made into goods, or just as often the hides are made into goods overseas and then shipped back here.

[Rod Sheridan]

Looks like Lumber Liquidators got caught selling flooring with high formaldehyde levels - story here (http://www.marketwatch.com/story/lumber-liquidators-stock-slammed-by-60-minutes-report-2015-03-02?siteid=bnbh).

Mike

Hi Mike, that's a fairly old issue.

The latest for them is that The Department of Justice is considering charging them under The Lacey Act for illegal harvesting of timber.

Interesting company.

Personally I no longer have faith in whether my local source for imported timber has actually done the research to prove that it's from sustainable growth and I now only buy local timber..............Regards, Rod.

[Phil Thien]

Personally I no longer have faith in whether my local source for imported timber has actually done the research to prove that it's from sustainable growth and I now only buy local timber..............Regards, Rod.

I'm right behind you. Too many people willing to compromise what few principles they have, for a buck.

North American species offer me plenty of selection. I've been sticking with those.

[Dave Lehnert]

Why is a product with high levels of formaldehyde cheaper?

[Mike Henderson]

Why is a product with high levels of formaldehyde cheaper?
The glue that does not outgass formaldehyde is more expensive than the glue that does.

Mike

[Mike Henderson]

Hi Mike, that's a fairly old issue.

The latest for them is that The Department of Justice is considering charging them under The Lacey Act for illegal harvesting of timber.

Interesting company.

Personally I no longer have faith in whether my local source for imported timber has actually done the research to prove that it's from sustainable growth and I now only buy local timber..............Regards, Rod.
I think you're thinking of the problem they have with sourcing Russian (I think it was) lumber while there were sanctions against it. This is a different, and new, issue.

Mike

[Tony Zona]

As for me, I would not touch any product Bob Vila has ever endorsed, but that's just me. I'm in the minority.

[Kent A Bathurst]

As for me, I would not touch any product Bob Vila has ever endorsed, but that's just me. I'm in the minority.

No. You are not in the minority.

See you and raise you: I would never watch a TV show with Bob Vila on it.

[Mike Cozad]

Just wait until they have to comply with all the regulations in China that we do here. Your cheap Chinese made products, across the board, won't be so cheap any more.

They have a disregard for doing the right thing over there, from this issue to lead in paint for kids toys to food issues, it's not something new, that's how they operate at the low end of the market. If you want top tier products, they have them to, but for the price you pay for that, you can certainly make it here.

Someone on this forum visited China to look for products and they went to a place that cut granite, etc, and I think he said there were people working with no masks, or little masks at all. Who works in a granite cutting factory with no masks? My guess is they don't live to see their 40's or 50's much from that factory floor. But hey, we get cheap granite from it, so it much be okay, right?

I'm sure most have seen this but thought I would post the link, as its a fine example of Scott's comments. I was working in metal stamping when I found this researching training material for some lean training I was developing. We were simply amazed by it....
Chinese Transfer Press: http://youtu.be/9fnVhDb-u8g

[Chris Damm]

My understanding is that it is limited to the laminate flooring and not the hardwood flooring they sell. Is that correct?

It's only the Chinese made laminate flooring.

[Scott Shepherd]

I'm sure most have seen this but thought I would post the link, as its a fine example of Scott's comments. I was working in metal stamping when I found this researching training material for some lean training I was developing. We were simply amazed by it....
Chinese Transfer Press: http://youtu.be/9fnVhDb-u8g

:eek::eek::eek::eek::eek: Wow....as a guy who spent most of his life on a shop floor, that one left my jaw dropped open.

I'm not at all defending the CEO because I believe you have a responsibility to make sure what you sell is what you say it is, but the part about them putting the labels on that said they were compliant with California law, when they weren't compliant is the part that gets me. If you took it to the worst level, then the CEO instructed them to do it, or the best case for him, he was clueless (not sure I believe that), but none the less, the fact that they will do whatever it takes to ship the product to the USA, no matter what is the disgusting part for me. How deep that knowledge was is what's going to cause them to sink or swim, and you have to feel certain their defense will be "We didn't know" and the blaming it on the Chinese factory who won't spend one day in court, so it'll be easy to say and not have an evidence to show otherwise. They aren't going to call the plant manager from China to testify that he has emails telling him to falsify records.

[Phil Thien]

:eek::eek::eek::eek::eek: Wow....as a guy who spent most of his life on a shop floor, that one left my jaw dropped open.

I'm not at all defending the CEO because I believe you have a responsibility to make sure what you sell is what you say it is, but the part about them putting the labels on that said they were compliant with California law, when they weren't compliant is the part that gets me. If you took it to the worst level, then the CEO instructed them to do it, or the best case for him, he was clueless (not sure I believe that), but none the less, the fact that they will do whatever it takes to ship the product to the USA, no matter what is the disgusting part for me. How deep that knowledge was is what's going to cause them to sink or swim, and you have to feel certain their defense will be "We didn't know" and the blaming it on the Chinese factory who won't spend one day in court, so it'll be easy to say and not have an evidence to show otherwise. They aren't going to call the plant manager from China to testify that he has emails telling him to falsify records.

I agree, this is going to turn into a giant finger-pointing cluster-you-know-what.

Ultimately, though, the buck stops with the man at the top. If he hired people willing to lie to his face over the safety of the product they're sourcing for 10-15% less than any similarly sized competitors, then he just didn't want to know.

[Scott Shepherd]

He's got a decent leg to stand on, I'm sure his documentation all says that it's CARB certified, and all the boxes say it's CARB certified, and the State of California apparently has a third party certify the factories the stuff is made in, which gives them the authority to put CARB certified on the boxes.

His defense would be "We ordered CARB certified, the box said it was CARB certified, and the State of California approved the manufacturer for production of CARB certified products. We didn't certify the manufacturer, the State of California did, and we just used their approved supplier". I could see him successfully using that defense, even though the buck stops with him. He'll play the victim in it all for sure.

Here's their website info about it all....

http://www.lumberliquidators.com/sustainability/health-and-safety/

[Mike Henderson]

:eek::eek::eek::eek::eek: Wow....as a guy who spent most of his life on a shop floor, that one left my jaw dropped open.

I'm not at all defending the CEO because I believe you have a responsibility to make sure what you sell is what you say it is, but the part about them putting the labels on that said they were compliant with California law, when they weren't compliant is the part that gets me. If you took it to the worst level, then the CEO instructed them to do it, or the best case for him, he was clueless (not sure I believe that), but none the less, the fact that they will do whatever it takes to ship the product to the USA, no matter what is the disgusting part for me. How deep that knowledge was is what's going to cause them to sink or swim, and you have to feel certain their defense will be "We didn't know" and the blaming it on the Chinese factory who won't spend one day in court, so it'll be easy to say and not have an evidence to show otherwise. They aren't going to call the plant manager from China to testify that he has emails telling him to falsify records.
I would not be willing to buy the defense of "We didn't know it was not CARB compliant". When some company offers to supply you with lumber that's significantly less expensive than other factories, a rational person would ask "How are they doing that?" and "Why isn't everyone else buying from them?" and get the lumber tested.

Ignorance, when the ignorance is willful, is not a defense.

Mike

[And California does not certify factories. They publish the testing standards and the manufacturer is suppose to test to those standards.]

[Scott Shepherd]

[And California does not certify factories. They publish the testing standards and the manufacturer is suppose to test to those standards.]

True, but they have a third party that certifies the companies in China, so they do have some responsibility in this, if their third party certified the place and it's producing non compliant materials.

"To comply with the CARB standards, applicable laminate and engineered flooring and accessories sold by Lumber Liquidators are purchased from manufacturers whose production methods have been certified by a Third Party Certifier approved by the State of California to meet the CARB standards; or from suppliers who source composite wood raw materials only from certified manufacturers."

[Jerome Stanek]

Is it certified in other states Every one knows California can be a little over board on some things.

[Scott Shepherd]

A quick look around the internet and it's a bit of a problem for anyone that thinks it all needs to be ripped out and replaced. In just a quick glance, it looks like most everything used to build a house has formaldehyde in it. The pressed board that made the bathroom vanities, the kitchen cabinets, the core floor that the Lumber Liquidators flooring is nailed to, the insulation under the house, in the attic, and in the walls, etc, etc, etc.

Seems OSB and pressed boards are really bad for it, so if someone wants to rid their home from it, they might have to start with a bulldozer.

[Pat Barry]

You can't trust 60 Minutes - they are into the same sort of sensationalism as other "news" shows. Who do you trust? Its all a bunch of B_
"Lumber Liquidators said in multiple statements throughout the day that it complies with applicable regulations regarding its products, including California standards for formaldehyde emissions. "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," the company said in one statement.
Shares in the flooring retailer had also fallen on news of the impending report last week. All told, the stock lost about 43 percent over the last week.

The company sought to calm customers and investors, insisting that "our laminate floors are completely safe to use as intended."
Lumber Liquidators said that it believes the CBS show used an "improper test method." The company added that it has documentation to support every step of its production process.
The flooring retailer also alleged in a statement that its chairman had addressed the company's test methodology, but "60 Minutes" had chosen not to include that information."

[Pat Barry]

Also
""Short sellers like Mr. Tilson make a living on manufacturing doubt about publicly traded companies like Lumber Liquidators. In this case, Mr. Tilson has trumpeted the fact that he was the impetus behind '60 Minutes' running this story," the company said after Tilson's Monday interview.
"Mr. Tilson is executing a well-established and profitable playbook: publicly speculate about a company's success and use a compliant media to execute on his strategy to drive down a company's valuation for his own personal gain," the statement continued. "These motives and methods are wrong, and we will fight these false attacks on all fronts."

Those statements right there make me think this is all much ado about nothing - but "Mr" Tilson should go to jail for slander.

[Mike Henderson]

True, but they have a third party that certifies the companies in China, so they do have some responsibility in this, if their third party certified the place and it's producing non compliant materials.

"To comply with the CARB standards, applicable laminate and engineered flooring and accessories sold by Lumber Liquidators are purchased from manufacturers whose production methods have been certified by a Third Party Certifier approved by the State of California to meet the CARB standards; or from suppliers who source composite wood raw materials only from certified manufacturers."
No matter what the chain of "certification", LL has a responsibility to sell products that meet the CARB standards. If they sell products that are not compliant, for whatever reason, they are still responsible. Their recourse is to sue the supplier of the product to recover their costs of replacing the product, and the penalties they have to pay. Of course, their chance of recovering anything in the courts of China are pretty slim.

Arguing that they were deceived might be good PR but it won't help them in court or with the regulators.

Mike

[Ken Fitzgerald]

Also
""Short sellers like Mr. Tilson make a living on manufacturing doubt about publicly traded companies like Lumber Liquidators. In this case, Mr. Tilson has trumpeted the fact that he was the impetus behind '60 Minutes' running this story," the company said after Tilson's Monday interview.
"Mr. Tilson is executing a well-established and profitable playbook: publicly speculate about a company's success and use a compliant media to execute on his strategy to drive down a company's valuation for his own personal gain," the statement continued. "These motives and methods are wrong, and we will fight these false attacks on all fronts."

Those statements right there make me think this is all much ado about nothing - but "Mr" Tilson should go to jail for slander.


Pat,

I think short selling should not be allowed for the very reason listed. I trust those who make their living on Wallstreet less than I do manufacturers. The news medias these days have little credibility too! They don't just report news, they go out generate it and of course, when wrong their apologies never get the same amount of headlines or air time as their story did.

[Mike Henderson]

A quick look around the internet and it's a bit of a problem for anyone that thinks it all needs to be ripped out and replaced. In just a quick glance, it looks like most everything used to build a house has formaldehyde in it. The pressed board that made the bathroom vanities, the kitchen cabinets, the core floor that the Lumber Liquidators flooring is nailed to, the insulation under the house, in the attic, and in the walls, etc, etc, etc.

Seems OSB and pressed boards are really bad for it, so if someone wants to rid their home from it, they might have to start with a bulldozer.
There are standards for how much formaldehyde can be outgassed. The CARB has very specific testing protocols which a product must meet. The question is not whether certain wood products outgass formaldehyde, but how much formaldehyde is outgassed from the product.

But in any case, we are addressing the specific situation of the products sold by LL. If you think other products are not meeting the standards, go short sell their stock.

Mike

[Scott Shepherd]

No matter what the chain of "certification", LL has a responsibility to sell products that meet the CARB standards.

I agree, in the end, it's all on them.

[Jerome Stanek]

I agree, in the end, it's all on them.

As I understand it there are only 13 states that follow the CARB certs. Why would this keep them from selling in states that don't.

[Mike Henderson]

As I understand it there are only 13 states that follow the CARB certs. Why would this keep them from selling in states that don't.
As long as they met the standards in those state, they'd be okay. But they sold in the states where they exceeded the standards. That's what's going to bite them.

Mike

[Pat Barry]

As long as they met the standards in those state, they'd be okay. But they sold in the states where they exceeded the standards. That's what's going to bite them.

Mike
It does sound like there is going to be quite a dispute about whether or not they failed to meet the standards. Some independent testing is in order.

[Jerome Stanek]

It should only effect them in states that are CARB required. So that wouldn't be as bad for them. 60 minutes make it sound like all they didn't meet this requirement everywhere.

[Larry Edgerton]

I checked them out when I bought flooring for my house last year, but to me they just seemed a little sleazy so I passed. After the Chinese drywall thing I don't trust them even a little bit for any building supplies.

I ended up with flooring made in Georgia by Shaw. I guess Warren Buffet is running short on cash.......

[Kent A Bathurst]

It should only effect them in states that are CARB required. So that wouldn't be as bad for them. 60 minutes make it sound like all they didn't meet this requirement everywhere.

True.

Recognize the facts, though: California has long been on the leading edge [many say bleeding edge] of environmental issues. Sooner or later, the rest of the country usually follows suit.

Plus - what is their advertising: "Banned in CA, but they're nuts anyway"? Hard row to hoe, IMO.

Two things you never want to see: Your name above the fold in the Washington Post, and Mike Wallace knocking on your door.

Wallace is gone, of course, but the point still stands.

[William Payer]

I checked them out when I bought flooring for my house last year, but to me they just seemed a little sleazy so I passed. After the Chinese drywall thing I don't trust them even a little bit for any building supplies.

I ended up with flooring made in Georgia by Shaw. I guess Warren Buffet is running short on cash.......


I used Shaw also. When we redid our kitchen a few years back LOML wanted hardwood floors. We checked out many major brands of hardwood and found their hardwood flooring (3/4 tongue and groove stuff) came from overseas, mainly China. This included common species readily available in the states like oak, maple, and cherry. We were impressed with Shaw in that they harvest their lumber from the US, and mill and finish it here also.
Fast foreward to today. We are in the process of building a new home and again searching for flooring. This time, laminate, primarily due to its high level of resistance to scratching by our two huskies.( our present home has all refinished 3/4" flooring and the dogs could easily scratch it. Shaw makes most of their laminate in the US but does import about 5-6 types from China. I emailed them and they gladly told me which lines were imported. To say the least, I am impressed by Shaw flooring.

[William Payer]

A quick look around the internet and it's a bit of a problem for anyone that thinks it all needs to be ripped out and replaced. In just a quick glance, it looks like most everything used to build a house has formaldehyde in it. The pressed board that made the bathroom vanities, the kitchen cabinets, the core floor that the Lumber Liquidators flooring is nailed to, the insulation under the house, in the attic, and in the walls, etc, etc, etc.

Seems OSB and pressed boards are really bad for it, so if someone wants to rid their home from it, they might have to start with a bulldozer.

OSB and other construction grade (read exterior exposure) materials are now manufactured with phenyl formaldehyde glues which are just about free of outgassing. They used to be made with urea formaldehyde glues, which are notorious for the level of outgassing of formaldehyde. So current OSB sheathing,roof sheathing, and subfloors are CARB compliant.
Also, MDF and particleboard can be obtained made with ( I assume the same phenyl formaldehyde glues) glues which outgas very little, and are certified both green and CARB compliant. That means your kitchen cabinets can be made with green,CARB compliant materials, despite having particle board cores.
Much has changed over the years. I remember our eyes stinging, and sinus and nose stuffiness when we first moved into our newly built 1980 home. If you use as much CARB compliant materials as possible, I would think it would be a better situation.

[Jason Roehl]

I haven't seen it in the wild, but I've caught a few episodes of "Holmes Makes It Right" lately that included the use of a drywall board that is supposed to absorb VOCs and formaldehyde gasses for up to 75 years. I'm curious how effective it is, and under what conditions it can no longer trap the gasses. I suspect it must contain activated charcoal, but that will release trapped gasses when heated.

[Scott Shepherd]

OSB and other construction grade (read exterior exposure) materials are now manufactured with phenyl formaldehyde glues which are just about free of outgassing. They used to be made with urea formaldehyde glues, which are notorious for the level of outgassing of formaldehyde. So current OSB sheathing,roof sheathing, and subfloors are CARB compliant.
Also, MDF and particleboard can be obtained made with ( I assume the same phenyl formaldehyde glues) glues which outgas very little, and are certified both green and CARB compliant. That means your kitchen cabinets can be made with green,CARB compliant materials, despite having particle board cores.
Much has changed over the years. I remember our eyes stinging, and sinus and nose stuffiness when we first moved into our newly built 1980 home. If you use as much CARB compliant materials as possible, I would think it would be a better situation.

I agree, you can build a house "today" that meets those requirements, how how many millions and millions of homes are out there, being lived in for the last 100 years or less, that have all those "horrible" things in them, from the ground to the roof. That was my point. People might be living in a house that was built in the 1980's when these laws weren't in place, now they put in the lumber liquidators material and "the sky is falling, we have to fix this right now". Well, okay, let's start by ripping up your subfloor, then ripping the walls out to get to the insulation, etc. I'd guess that the LL product was the least of their worries if they'd be living in the home for 20-30 years with all the older generation products.

[Larry Browning]

I used Shaw also. When we redid our kitchen a few years back LOML wanted hardwood floors. We checked out many major brands of hardwood and found their hardwood flooring (3/4 tongue and groove stuff) came from overseas, mainly China. This included common species readily available in the states like oak, maple, and cherry. We were impressed with Shaw in that they harvest their lumber from the US, and mill and finish it here also.
Fast foreward to today. We are in the process of building a new home and again searching for flooring. This time, laminate, primarily due to its high level of resistance to scratching by our two huskies.( our present home has all refinished 3/4" flooring and the dogs could easily scratch it. Shaw makes most of their laminate in the US but does import about 5-6 types from China. I emailed them and they gladly told me which lines were imported. To say the least, I am impressed by Shaw flooring.
Before you give up on hardwood, look into prefinished hardwood flooring. The finish put on at the factory is FAR superior to any finish applied after installation. We have some prefinished hardwood flooring that seems to be every bit as tough as ceramic tile. I don't know what they use, but it is tough and very scratch resistant.

[Jason Roehl]

Before you give up on hardwood, look into prefinished hardwood flooring. The finish put on at the factory is FAR superior to any finish applied after installation. We have some prefinished hardwood flooring that seems to be every bit as tough as ceramic tile. I don't know what they use, but it is tough and very scratch resistant.

It's aluminum oxide (a ceramic), which is what a lot of sandpaper uses for abrasive. It's a major pain in the rear to refinish, as it doesn't sand off easily.

As for its superiority over post-installation application of finishes, that's debatable. It's tougher, to be sure, than most of what can be bought, but there are other factors, that (to me) are more important.

[Larry Edgerton]

Hey Jason. I have prefinished with an aluminum oxide finish and I was thinking I would like to put a coat of something over the whole thing next summer. Not sure about the what and how.

What say you?

Thanks, larry

[Jason Roehl]

Hey Jason. I have prefinished with an aluminum oxide finish and I was thinking I would like to put a coat of something over the whole thing next summer. Not sure about the what and how.

What say you?

Thanks, larry

Clean it well, then screen it with 150 or 180 grit (and clean it well again--vacuum and go over it with a damp terry cloth or microfiber). Then you should be able to use whatever finish you want.

[Mike Henderson]

I agree, you can build a house "today" that meets those requirements, how how many millions and millions of homes are out there, being lived in for the last 100 years or less, that have all those "horrible" things in them, from the ground to the roof. That was my point. People might be living in a house that was built in the 1980's when these laws weren't in place, now they put in the lumber liquidators material and "the sky is falling, we have to fix this right now". Well, okay, let's start by ripping up your subfloor, then ripping the walls out to get to the insulation, etc. I'd guess that the LL product was the least of their worries if they'd be living in the home for 20-30 years with all the older generation products.
For many chemicals used in modern products, the danger in them was not recognized when they were first introduced. It's been shown that formaldehyde is one of those chemicals that can cause problems in humans. It doesn't cause problems in everyone, and it can take a long time for the problems to show up - but it does cause serious problems, even leading to death, in certain people. The formaldehyde outgassed from the material used in those houses built in the '80's probably caused the death of a certain small percentage of the people who lived in those houses.

Now that we understand the problems of formaldehyde, standards have been put in place to limit the amount of formaldehyde outgassed from the construction material. Those standards have the force of law and material sold in certain states have to meet those standards.

The outgassing of formaldehyde decreases as the material ages so houses built back in the '80's, for example, would not have high levels of formaldehyde today from the material continuing to outgass. No one should even consider replacing material installed in the '80's because of formaldehyde.

But now that we understand the danger of formaldehyde outgassed from construction material, and especially where strict standards have been put in place, the construction material used needs to meet those standards.

Mike

[Scott Shepherd]

I'm not disagreeing with you Mike, I'm simply pointing out that this will be the thing to freak people out, when, if their homes were tested, their kids toys were tested, the .59 cent notebooks they buy their kids at wal-mart were tested, then the floors might not even be in the top 10 of dangerous things. And I'd also like to understand more about the floors outgassing. Where's it outgassing from? It's sealed on the top and edges. My gut tells me that it's not remotely as much coming up as one may initially think.

I don't dispute it's something we should try and build without, but formaldehyde is a natural thing, found it nature, so it's not as if breathing one second of it is going to cause health issues. We are, and have been, exposed to it since we were born in some fashion. We all grew up in houses with it, built into the homes. Doesn't mean it's right, but just that it's how we've existed for the last 100 years, so we can probably make some tweaks and make it another 100, but I'm not buying the sky is falling mentality of the story.

Again, not saying it's shouldn't be a goal to remove it, but I'm just not one of those people that gets whipped up into a frenzy of "off with their heads" because someone appears on the news. What if CBS did leave out some comments that backed up their claims about testing? Would people be going after CBS as hard as they are after LL? I doubt it.

[Scott Shepherd]

This is a quote that would make me think twice about some of it, from the LL site. If it's true, and can be verified, then the people pushing it should be in jail for trying to profit from the short selling (in my opinion).

"As recently as late 2014, testing by independent third parties confirmed that 100 percent of the randomly selected cores used in the laminates from the three factories that 60 Minutes investigated came back as fully safe and compliant with California standards."

[William Payer]

Before you give up on hardwood, look into prefinished hardwood flooring. The finish put on at the factory is FAR superior to any finish applied after installation. We have some prefinished hardwood flooring that seems to be every bit as tough as ceramic tile. I don't know what they use, but it is tough and very scratch resistant.



All of our floors inthe house, with the exception of one room, are factory pre-finished flooring. Unfortunately, even the aluminum oxide finishes, as durable as they are, are no match for the nails on our dogs. Believe me, I would much rather have solid wood, or even engineered wood floors rather than laminate, but we have learned our lesson.
Interestingly, the one floor (Bellawood from LL) that claimed the hardest, most durable finish of all pre-finished flooring, scratches the most easily! Perhaps the maple under the finish is just too soft, allowing the dogs nails to make an indentation in both the wood and finish, so the finish might not be the culprit. At any rate, we have learned that real solid wood is not in the cards for us, as long as we have the canines.

[William Payer]

This is a quote that would make me think twice about some of it, from the LL site. If it's true, and can be verified, then the people pushing it should be in jail for trying to profit from the short selling (in my opinion).

"As recently as late 2014, testing by independent third parties confirmed that 100 percent of the randomly selected cores used in the laminates from the three factories that 60 Minutes investigated came back as fully safe and compliant with California standards."

I suppose one would have to look into the random sampling and see how many samples were taken, and how spread apart ( days, weeks, months) they were to get a real idea of the validity of that statement. Just playing devil's advocate---If they took 5 samples during one shift , the statement above could be true, but it would be a very biased method of sampling holding little or no validity.

All parties in this dispute may very well be parsing their words carefully and only true hard data canback up thier (both sides) statements.

[Lee Reep]

I received a Lumber Liquidators sales flyer in the mail today. Talk about poor timing. They didn't have time to make sure they pointed out which flooring in the ad had the really high levels of formaldehyde.

[Shawn Pixley]

Is it certified in other states Every one knows California can be a little over board on some things.

Back the truck up there. First, "everyone knows..." is false and inflammitory. Second, you're criticising the state (the most populous by the way) that has done more to clean up its air than any other for that is asking for certification to provide better air quality for its citizens?

Should we be looking for the standards of the state with the most polution per capita? What logic is that?

[Pat Barry]

Back the truck up there. First, "everyone knows..." is false and inflammitory. Second, you're criticising the state (the most populous by the way) that has done more to clean up its air than any other for that is asking for certification to provide better air quality for its citizens?

Should we be looking for the standards of the state with the most polution per capita? What logic is that?
LOL - I had the same thoughts about CA but didn't say it. No offense intended

[Mel Fulks]

California had and has a lot of pollution . Has taken steps to reduce it. That doesn't mean other states need to do same
thing . Federalism works.

[Mike Henderson]

I'm not disagreeing with you Mike, I'm simply pointing out that this will be the thing to freak people out, when, if their homes were tested, their kids toys were tested, the .59 cent notebooks they buy their kids at wal-mart were tested, then the floors might not even be in the top 10 of dangerous things. And I'd also like to understand more about the floors outgassing. Where's it outgassing from? It's sealed on the top and edges. My gut tells me that it's not remotely as much coming up as one may initially think.

I don't dispute it's something we should try and build without, but formaldehyde is a natural thing, found it nature, so it's not as if breathing one second of it is going to cause health issues. We are, and have been, exposed to it since we were born in some fashion. We all grew up in houses with it, built into the homes. Doesn't mean it's right, but just that it's how we've existed for the last 100 years, so we can probably make some tweaks and make it another 100, but I'm not buying the sky is falling mentality of the story.

Again, not saying it's shouldn't be a goal to remove it, but I'm just not one of those people that gets whipped up into a frenzy of "off with their heads" because someone appears on the news. What if CBS did leave out some comments that backed up their claims about testing? Would people be going after CBS as hard as they are after LL? I doubt it.
The problem with LL is that there is a standard that the flooring is required to meet. You can argue that the standard is too strict and that the formaldehyde is not harmful but the standard is based on scientific studies and the company has to meet those standards.

Let's wait and see what further studies of the materials turn up. Based on past stories of products made in China - melamine in milk which killed Chinese babies, dog treats that killed dogs, drywall that was defective - I don't have a lot of confidence that the factory that made LL's products were made to CARB standards. The price should tell you something - it's a commodity business so it's really difficult to be a lot less expensive than another factory unless you cheat.

It should also tell you something that other suppliers of flooring did not buy from that factory. Perhaps they knew something that LL just didn't want to recognize.

Mike

[Jerome Stanek]

I installed laminate flooring in my daughters house 6 years ago and her 2 large dogs have not scratched it yet she has a Pyrenees and a Newfoundland 2 different types of paws

[Dan Hintz]

I received a Lumber Liquidators sales flyer in the mail today. Talk about poor timing. They didn't have time to make sure they pointed out which flooring in the ad had the really high levels of formaldehyde.

I received mine a couple of days ago... don't have need for flooring right now, so directly into the recycle bin it went.

One point I don't think anyone has touched on is HOW the testing was done. The CEO of LL mentioned the testing method used by 60 Minutes was not the same as that required by CARB certification... if that's true, then the 60 minutes testing is a red herring. If the flooring fails the true CARB testing, then LL has a serious problem on their hands.

[William Payer]

I agree, you can build a house "today" that meets those requirements, how how many millions and millions of homes are out there, being lived in for the last 100 years or less, that have all those "horrible" things in them, from the ground to the roof. That was my point. People might be living in a house that was built in the 1980's when these laws weren't in place, now they put in the lumber liquidators material and "the sky is falling, we have to fix this right now". Well, okay, let's start by ripping up your subfloor, then ripping the walls out to get to the insulation, etc. I'd guess that the LL product was the least of their worries if they'd be living in the home for 20-30 years with all the older generation products.


Those older homes( we live in one built in 1980) did outgas a lot of VOC's including formaldehyde, but as I understand it, the outgassing is at its maximum the first year and quite readily diminishes (due to less and less of the noxious material in the products) thereafter. I would think a 1980's home would be close to CARB compliant in terms of outgassing after 5 or so years. I wonder if anyone has done any testing to that effect. Despite this assumption, I would not condone introducing anything to the home (even if its a home from an era where highly outgassing materials were used) at this point in time that would not be CARB compliant. Its like saying our generation remembers handling mercury in science classes, so administering anything to that generation now with high mercury levels is now O.K.

[Jerome Stanek]

I wonder if you would use multiple contain Formaldehyde would it still meet the CARB standards. Each one off gassing just the enough to be CARB compliant

[Phil Thien]

One point I don't think anyone has touched on is HOW the testing was done. The CEO of LL mentioned the testing method used by 60 Minutes was not the same as that required by CARB certification... if that's true, then the 60 minutes testing is a red herring. If the flooring fails the true CARB testing, then LL has a serious problem on their hands.

I think the 60 Minutes reported responded that the tested they had done by independent labs was done in accordance w/ CARB standards.

[Tony Zona]

I have never received an email from Lumber Liquidators until this morning. After I commented in this thread. Is this a coincidence, or what?

[eugene thomas]

I guess LL might not be around to honor their 100 year warrants on their flooring.....

[Shawn Pixley]

We'll agree to disagree. Air polution like radiation does not respect arbitrary man made lines on maps. Formaldehyde, is a naturally occuring substance. But so it cyanide, arsenic, chlorine, flourine, asbestos, etc...

It seems inconscionable that we would willingly expose our citizens to known unsafe conditions when we don't have to.

[Scott Shepherd]

We'll agree to disagree. Air polution like radiation does not respect arbitrary man made lines on maps. Formaldehyde, is a naturally occuring substance. But so it cyanide, arsenic, chlorine, flourine, asbestos, etc...

It seems inconscionable that we would willingly expose our citizens to known unsafe conditions when we don't have to.

I don't think a single person in this thread has recommended that we don't try to make things safer for people. Not one. What some of us are saying is that we're not so sure we believe the story, which has huge financial benefits for the short sellers. 60 minutes doesn't own the truth, they just do stories, and the part of the story they intentionally left out of their story answered some of the questions asked, or raised some concern about their testing. Those two things alone are enough to pause for just a moment until we get to the bottom of things.

Just because 60 minutes says it, doesn't make it true, just in the same way that just saying they are complaint doesn't make them compliant. The facts are the facts, but at this point, I don't trust either source. When you omit things from your reporting that raises issues, then you're no longer reporting, you're pushing an agenda. Once that happens, then I don't trust what you say at face value. Doesn't mean you aren't right, just means that you've proven to me that I can't take your word for it, and I'd have to look deeper at your information. Ask Lara Logan how it's going from 60 minutes? She didn't tell the truth in her reporting on 60 minutes and it finally cost her her job. So it's not like they have a track record of telling the truth all the time.

If the guys raising the story and so concerned about it all, then, knowing they were short sellers, why wouldn't they clear all their short positions and take this head on from a standpoint of doing the right thing? My guess is the minute they are out of their short positions, the story will disappear. It's disgusting that anyone can get face time on 60 minutes that's bashing any company, that's currently holding a short position in the company.

And let's be honest, it's not like 200,000,000 people watch 60 minutes. Probably 99% of the people know nothing about this story and will continue to shop there.

[Pat Barry]

We'll agree to disagree. Air polution like radiation does not respect arbitrary man made lines on maps. Formaldehyde, is a naturally occuring substance. But so it cyanide, arsenic, chlorine, flourine, asbestos, etc...

It seems inconscionable that we would willingly expose our citizens to known unsafe conditions when we don't have to.
Here is an article related to your opinion Shawn - http://minnesota.cbslocal.com/2014/05/26/are-flame-retardants-causing-cancer-in-firefighters/

The firefighters seem to lobbying to remove flame retardants from building materials. OK, then what? Maybe they won't save your house if its not been pre-certified to be acceptable to them?

[Phil Thien]

I have never received an email from Lumber Liquidators until this morning. After I commented in this thread. Is this a coincidence, or what?

Quick, start writing about supermodels.

[Mike Henderson]

If the guys raising the story and so concerned about it all, then, knowing they were short sellers, why wouldn't they clear all their short positions and take this head on from a standpoint of doing the right thing? My guess is the minute they are out of their short positions, the story will disappear. It's disgusting that anyone can get face time on 60 minutes that's bashing any company, that's currently holding a short position in the company.

And let's be honest, it's not like 200,000,000 people watch 60 minutes. Probably 99% of the people know nothing about this story and will continue to shop there.
Economics is the driving force behind the actions of most people - there aren't very many Mother Teresa's in society. If there was not a financial incentive, this story would not have come to light. And I doubt if this story is going to disappear - we may not hear the news, but the suits from this will be going on for years.

While many people may not have seen 60 minutes, the story was on the national news that I watch. It was either CBS or NBC. That's a much larger audience.

Mike

[Scott Shepherd]

While many people may not have seen 60 minutes, the story was on the national news that I watch. It was either CBS or NBC. That's a much larger audience.

Mike

Not by much ;) Most people don't know who the Vice President is, so I'm guessing it isn't much of a water cooler discussion among the mass population. I haven't had anyone mention it to me, and if it wasn't on this forum, I wouldn't have known about it, and I'm not far from their home office. I have a customer that is in the same industrial complex so I ride by them to get to my customer.

[Shawn Pixley]

I don't think a single person in this thread has recommended that we don't try to make things safer for people. Not one.

Scott, With all due deference of your opinion, we have people who have stated their opinion that California's environmental standards are unreasonably high which is what I was responding to. There is no evidence presented why they thought the standard was too high, but only that it was from California. My point was that in the interest of public health and public safety, why would we look to to standards that are less than the prevailing standards. If California had not issued tougher emission standards for cars do we really believe that Car makers and other states would have followed? Oviously this is rhetorical in the context of the LL discussion. Looking to a lower standard is like asking for a new car without airbags. Or maybe we should ask the polluters of the Cuyahoga river (which burned) whether they think the clean water act is too strict.



What some of us are saying is that we're not so sure we believe the story, which has huge financial benefits for the short sellers. 60 minutes doesn't own the truth, they just do stories, and the part of the story they intentionally left out of their story answered some of the questions asked, or raised some concern about their testing. Those two things alone are enough to pause for just a moment until we get to the bottom of things.

Just because 60 minutes says it, doesn't make it true, just in the same way that just saying they are complaint doesn't make them compliant. The facts are the facts, but at this point, I don't trust either source. When you omit things from your reporting that raises issues, then you're no longer reporting, you're pushing an agenda. Once that happens, then I don't trust what you say at face value. Doesn't mean you aren't right, just means that you've proven to me that I can't take your word for it, and I'd have to look deeper at your information. Ask Lara Logan how it's going from 60 minutes? She didn't tell the truth in her reporting on 60 minutes and it finally cost her her job. So it's not like they have a track record of telling the truth all the time.

If the guys raising the story and so concerned about it all, then, knowing they were short sellers, why wouldn't they clear all their short positions and take this head on from a standpoint of doing the right thing? My guess is the minute they are out of their short positions, the story will disappear. It's disgusting that anyone can get face time on 60 minutes that's bashing any company, that's currently holding a short position in the company.

And let's be honest, it's not like 200,000,000 people watch 60 minutes. Probably 99% of the people know nothing about this story and will continue to shop there.


Second, I never made any comment as to whether or not I believed the story. I didn't see it and I don't care for 60 minutes sensationalism. I also am fundamentally opposed to short sellers as well. I fully recognize the conflicts in their motives.

However, having traveled for business extensively in China and visiting numerous plants, I have no trouble believing that the story Could be true. I have seen falsification there. I have had conversations with governmental officials who will categorically state that IP / Patent and Trademark Protections are robust in China and in their next breath cheerily lead you to the knock-off mall. I have Bamboo flooring (strand) in my house that was purchased from LL. I have the ability (but not yet the means) to test and measure the IAC of the room where I have that flooring. If it passes, will that mean that the story is indisputably false? No. what it will mean is that my lot of flooring does not present a risk. I have a scientific and architectural background. I will reserve conclusions as to the accuracy of the claim until it is reputably verified (Preferably a Peer-reviewed level publication). I did this when I first read the claim about cold fusion. I will do this again.

Please don't make claims about what I did or did not say that aren't true. So the bulk of your reply to me was about the short sellers and 60 Minutes sensationalism which I never commented upon until this post.

[Dave Zellers]

There is nothing wrong with short selling, it is healthy to an open market.

This issue is about shorting a stock and then planting negative stories about the company. If the stories are true, then even that is fine, but there needs to be some sort of punishment if the shorter is putting out lies.

This also happens on the other side. Someone takes a large long position in a stock and then starts feeding lots of glowing reports about the company.

[Scott Shepherd]

Scott, With all due deference of your opinion, we have people who have stated their opinion that California's environmental standards are unreasonably high

Can you point to one post that said that the CARB standards were unreasonably high? I also couldn't find one thread about anyone saying we should have more pollution, or allow more harmful chemicals in our homes.

[Malcolm Schweizer]

Today on Facebook an ad popped up for a law firm asking me if I had bought flooring from Lumber Liquidators, and offering to help me sue them.

[Scott Shepherd]

I went to LL to buy some wood for a project and while the guy was typing the order in, I asked him about it and asked him if their sales had been hurt by the story. He said initially their sales were way down, but things had come back to normal now. He told me that they had requests from customers about testing and they were sending out free test kits to customers. He said so far, they had received over 2,500 test kits back, or the results (I'm not sure how he worded it) and so far, there has not been one test that was positive.

That's pretty strong evidence- 2,500 kits reporting zero issues?

He also said the guy that brought all this up has now said he's no longer pursuing LL at all.

So....a short seller pushes a story that tanks the company stock, the guy makes all his money,then he decides not to pursue it any longer? If that's true, then that guy should go to prison for manipulating the stock and he should be liable for the damages against the company, in my opinion.

[Kent A Bathurst]

If that's true, then that guy should go to prison for manipulating the stock and he should be liable for the damages against the company, in my opinion.

Hoeing the wrong row. 60 Minutes published the story......you'd have to go after them. And, the fact that they did broadcast that story would give him a pretty unassailable defense that there was merit to his claims...........unless the 60 Min suit uncovered fraud and collusion in their story.

[Scott Shepherd]

Section 10(b) of the Securities Exchange Act of1934 (the “Exchange Act”) prohibits the use of “anymanipulative or deceptive device or contrivance”in contravention of SEC rules.


I'm not sure how create a story that may turn out to be untrue and pushing it to a news channel isn't manipulative or deceptive, when you profited heavily from the fall of the stock price.

[Phil Thien]

Section 10(b) of the Securities Exchange Act of1934 (the “Exchange Act”) prohibits the use of “anymanipulative or deceptive device or contrivance”in contravention of SEC rules.


I'm not sure how create a story that may turn out to be untrue and pushing it to a news channel isn't manipulative or deceptive, when you profited heavily from the fall of the stock price.

What (in the 60-Minutes Story) did they get wrong? I haven't watched it lately but I remember they showed a guy in a Chinese facility that supplies LL indicating the product in the box didn't match the certification. And that they purchased samples from LL stores in the U.S. and had them tested, and that the samples didn't pass.

[Kent A Bathurst]

OK. But I don't see it - what did he do? Call up 60 MIn and say: "I've got a story I think you should investigate"?

I'm asking from a pragmatic, real-life, perspective of the justice system. Especially in today's "too big to jail" environment.

[Scott Shepherd]

The LL people said they disputed those facts and their side of the story was left out of the airing.

However, if the initial panic that was created that it's emitting toxic levels that can harm people is fraudulent then someone should be held accountable. If they go through all of this and send out 10,000's of test kits and have zero come back that are out of the California limits, then it means the story was fraudulent.

However, we're not there yet, I'm only reporting the numbers I heard from the LL employee. Maybe they send out 10,000 and get 1000 positive, in which, the case was true, but right now, with 2500 in and zero bad, that's a LOOOOOONGGGGGGGGGGGGGGGGG way from having to rip up and replacing the flooring in millions of homes nationwide, which is where the story was heading.

[Kent A Bathurst]

Well, thankfully the random retail clerk at a random LL store is an unbiased source with access to all the detailed inside information.

[Phil Thien]

The LL people said they disputed those facts and their side of the story was left out of the airing.


Yeah, a skilled editor could make Mother Theresa look sketchy, so I guess we will have to wait until more details come in.

The thing is, though, that it is possible that LL sold materials that didn't meat the standards (and which they KNEW didn't meat the standards) initially, but which do so now (due to outgassing).

I guess we just need more details to emerge.

[Scott Shepherd]

Well, thankfully the random retail clerk at a random LL store is an unbiased source with access to all the detailed inside information.


As opposed to the zero local stories about people's tests coming back positive and LL having to fix them?

Since that airing, I haven't seen one single story that showed anyone that had an issue from it. If there are no people having issues with it, then where's the story? On LL? Or on someone that manipulated the media for financial gain?

I'm not sure Phil, but you'd think if it were truly happening, you'd see the "Sky is falling" stories all over the news and LL would be scrambling to try and fix those with issues. Yet again, no stories of that happening that seem to be making it to the front pages.

Was it an issue? I don't know. But what I do know is zero positive samples out of the 2,500 isn't weighing too good on the case against them right now.

[Kent A Bathurst]

There are stories in the news about regional distributors paying for tests for their customers. More data will be appearing. From sources other than the company's own investigation.

Also - predictable - there are a number of stories about the the sharks in the water, scaring up enough potential injured parties to get a class certified by the courts, and start class-action suits.

My basic point, Scott, is that there is not - yet - enough legitimate, 3d party information [beyond the 60 Min muckraker's piece] to put a stake in the ground.

And, of course - unless something else shows up, I can't see a remote possibility of going after the short-selling hedge fund guy for manipulation. That case simply won't make.

[Mike Henderson]

That's pretty strong evidence- 2,500 kits reporting zero issues?

Unfortunately, even if every test of the air quality in every home came back negative, it would not be a defense against the claim that they sold product that did not meet the CARB standards. It might be evidence that the standard is stricter than necessary, but the offense has to do with the question of whether the product sold met the standard or not.

When we have sufficient testing by independent labs of the products sold, tested according to the test standards established by CARB, only then will we know whether there's a case against LL or not.

Mike

[To be more specific, you don't get to discharge pollution (for example) and then claim that no one was harmed by the pollution and therefore you should not be prosecuted. Environmental laws only require evidence that you discharged the pollution, and not that any specific people were harmed.]

[Scott Shepherd]

[To be more specific, you don't get to discharge pollution (for example) and then claim that no one was harmed by the pollution and therefore you should not be prosecuted. Environmental laws only require evidence that you discharged the pollution, and not that any specific people were harmed.]

Yeah, except the issue wasn't that they are not harming anyone. The claim and story was based around millions of homes being so toxic that people would have to leave until the floors were ripped up and replaced, and that 1000's and 1000's of people would be deadly ill because of it.

Again, where are the stories about all the people who got sick? Where are all the stories about people having to move out of their homes until the floors were fixed? I haven't seen a single one. That's what the story was about.

Like I keep saying, it might turn into an issue where there are 1000's of stories, but doesn't it even seem remotely odd that since the story was filmed 6 months ago and aired a month ago, that there hasn't been a single news story about someone that was actually harmed from it or actually has levels of formaldehyde that are above standards? Doesn't that strike anyone else as odd? It does me. That doesn't mean I believe it's all settled, it just means that I think it's odd that there's been no stories about anyone actually harmed.

[Mike Henderson]

Yeah, except the issue wasn't that they are not harming anyone. The claim and story was based around millions of homes being so toxic that people would have to leave until the floors were ripped up and replaced, and that 1000's and 1000's of people would be deadly ill because of it.

Again, where are the stories about all the people who got sick? Where are all the stories about people having to move out of their homes until the floors were fixed? I haven't seen a single one. That's what the story was about.

Like I keep saying, it might turn into an issue where there are 1000's of stories, but doesn't it even seem remotely odd that since the story was filmed 6 months ago and aired a month ago, that there hasn't been a single news story about someone that was actually harmed from it or actually has levels of formaldehyde that are above standards? Doesn't that strike anyone else as odd? It does me. That doesn't mean I believe it's all settled, it just means that I think it's odd that there's been no stories about anyone actually harmed.
I don't know where you're going with all of this. I didn't see the 60 minutes show (or whoever put the story on) and the show doesn't matter. Whoever put the story on, I'm sure they laid it on thick because that's what those programs do.

But the core of the story is that LL sold product that did not meet the CARB standards, and that's what this is all about. If they did, then they're in trouble. If they didn't, then they come out clean. The rest is just noise.

As I said before - When we have sufficient testing by independent labs of the products sold, tested according to the test standards established by CARB, only then will we know whether there's a case against LL or not.

Mike

[Scott Shepherd]

I don't know where you're going with all of this. I didn't see the 60 minutes show (or whoever put the story on) and the show doesn't matter. Whoever put the story on, I'm sure they laid it on thick because that's what those programs do.

But the core of the story is that LL sold product that did not meet the CARB standards, and that's what this is all about. If they did, then they're in trouble. If they didn't, then they come out clean. The rest is just noise.

As I said before - When we have sufficient testing by independent labs of the products sold, tested according to the test standards established by CARB, only then will we know whether there's a case against LL or not.

Mike

That's not what the story was Mike. The story wasn't about whether they were CARB compliant. That was mentioned, yes, but the story was based around the fact that they were poisoning millions of families, knowingly, and for profit.

My point is that so far, we've not seen one single case of that happening.

The story wasn't about simply not being CARB compliant, it was about poising millions of homes and all the horrific damage was being done to people.

[Scott Hearn]

The prices of having stuff made in China is starting to go up because workers are demanding better pay and better working conditions. In some of the larger Chinese cities they are starting to realize just how much pollution lax regulations is causing. Some companies are moving production back to the USA or not going to China at all because the cost difference isn't as great anymore. Turnaround times in the USA are much faster in most cases. Some companies that manufacture in the USA want to buy all their parts in the USA if they can. There is some hardware that nobody makes in the USA anymore. It has to be bought overseas unless someone wants to have a custom order done at high cost.

I read something recently that there are basically no tanneries left in the USA. The environmental regulations here cost too much to comply with. Animals are killed here and their hides are sent overseas for tanning and then back here to be made into goods, or just as often the hides are made into goods overseas and then shipped back here.

The items that are no longer made in the USA are staggering in number. Just try to find a table saw that's completely manufactured (machined in the U.S. from U.S. materials and assembled) here. There be be a few, but they aren't made for the consumer market.

[Mike Henderson]

That's not what the story was Mike. The story wasn't about whether they were CARB compliant. That was mentioned, yes, but the story was based around the fact that they were poisoning millions of families, knowingly, and for profit.

My point is that so far, we've not seen one single case of that happening.

The story wasn't about simply not being CARB compliant, it was about poising millions of homes and all the horrific damage was being done to people.
I don't care about what the story was about and I wonder why you care about it. The financial and criminal risk to the company is simply whether they were selling product that was CARB compliant or not.

The story has run and nothing you or I do is going to change that. Let it go.

Mike

[Todd Willhoit]

I don't care about what the story was about and I wonder why you care about it.

You must care, you are the OP.

Some of us are interested because it smells of stock market manipulation and dirty money.

[Mike Henderson]

You must care, you are the OP.

Some of us are interested because it smells of stock market manipulation and dirty money.
I am interested in the story because of the allegations of selling non-CARB compliant product and the possible resulting financial and criminal sanctions that the company may face. The sensational aspects of the story that may have been in the story (I didn't see the program) are not of interest to me because I know that those shows do such things to boost their ratings.

The important question is whether the company sold non-compliant material, and only testing by independent labs, to the testing standards set by the CARB, will establish that.

Regarding any questions of stock manipulation, truth is the ultimate defense. If the material tests show that the product did not meet the CARB standards there would be no question of manipulation. Do you really think that some investors could get a national "news" program to produce a show that was patently false?

Why don't we all wait until we see the results of the tests?

Mike

[Perhaps you feel that the people who first discovered the possible selling of non-CARB product should have alerted the authorities and not shorted the stock first. While that might have been a noble approach to the issue, they were under no legal obligation to handle it in that fashion. The information they had was developed by them so it was not insider information. This is in contrast to a situation where an employee learns that the profits of the company are not going to be good this quarter so s/he goes out and shorts the stock prior to the announcement. That person is acting on insider information. They would not have that information except for their position in the company and their ability to access non-public information.]

[Jim Matthews]

Are you questioning the Federal standards on pollutants, again - as a moderator?

[Pat Barry]

It seems to me the guy was manipulating the stock and he did it in a creative way and now he should be going to a federal penitentiary in a creative way. All the rest of this is just noise.

[Scott Shepherd]

Are you questioning the Federal standards on pollutants, again - as a moderator?

Seriously? Where has anyone, including myself said that the Federal pollution standards are too tight? I certainly haven't said it. Please, don't try and paint me into the "Wants dirty air and water" character.

I thought this was a discussion, I didn't realize it was all settled. I thought it was interesting to me, at least, that so far, there's been zero confirmed cases of the materials actually violating the CARB standards. You have the test results from the news story, which is bizarre, that the person commenting on it didn't even see the news story, but outside of that news story, which was prompted by a person that had a vested interest in the stock going down, there hasn't been any mention of anyone that's found one board of non CARB compliant material. Not one. So a major story breaks on how non compliant their products are and we still haven't seen one non compliant board show up in a customers house?

Again, for the third time, that might all change, but so far, at this point in time, we're at ZERO. That number might go to 1,000,000. If so, then the story was true and they should pay for their actions.

I found that interesting. If you didn't, that's okay too, just move on and read another post, but to suggest that one shouldn't be able to post because this topic is settled is not correct.

[Pat Barry]

All this talk about the CARB standards has me wondering what the CARB standards (for formaldehyde) really are. Who actually has the info on the CARB and Federal standards related to the supposed violation?

[Mike Henderson]

It seems to me the guy was manipulating the stock and he did it in a creative way and now he should be going to a federal penitentiary in a creative way. All the rest of this is just noise.
Of course, being legally creative is what the financial people do. If you want to get really incensed, read about some the legal tax avoidance schemes that the tax lawyers come up with. That will really get you going.

Mike

[John Huds0n]

You can read one of the actual lawsuits here
https://consumermediallc.files.wordpress.com/2015/03/hagens_berman_lumber_liquidators_complaint.pdf

I think it is interesting - one of the responses from Lumber Liquadators: (note - it is not their fault they were purchasing these products cheaper than anyone else and they didn't know why they were getting such a good deal...)


“While our suppliers agree to operate in compliance with applicable laws and regulations, including those relating to environmental and labor practices,
we do not control our suppliers.
Accordingly, we cannot guarantee that they comply with such laws and regulations or operate in a legal, ethical and responsible manner Violation
of environmental, labor or other laws by our suppliers or their failure to operate in a legal, ethical and responsible manner, could . . . expose us
to legal risks as a result of our purchase of product from non-compliant suppliers.”

[Scott Shepherd]

You can read one of the actual lawsuits here
https://consumermediallc.files.wordpress.com/2015/03/hagens_berman_lumber_liquidators_complaint.pdf

I think it is interesting - one of the responses from Lumber Liquadators: (note - it is not their fault they were purchasing these products cheaper than anyone else and they didn't know why they were getting such a good deal...)

That's a class action lawsuit. It's based on the 60 minutes piece. It pulls quotes directly from the tv show. I liked the part where they said in the complaint "One internet user said their son couldn't walk on the floor without getting blisters". Really? We're now quoting comments from the internet without confirmation of the actual person existing?

Then the listed person in there said he installed it in March and in May, someone in the family started sneezing, itching, etc. When taken to the doctor, the doctors couldn't determine the cause. Really? So if I buy a new car, and 2 months later, my eyes are watering and I go to the doctor and he says "I don't know what's causing it", then that means I get to sue the car manufacturer?

I'm still not seeing any documentation of one single case where it's been measured to be outside of CARB standards in someone's house.

Maybe it's just going to take more time, which I'm fine with giving, but apparently this has been going on for 2 years or more, and there's not one documented case of it exceeding the carb standards in someone's house?

[Mike Henderson]

I'm still not seeing any documentation of one single case where it's been measured to be outside of CARB standards in someone's house.

The CARB standards are not measurements in someone's home. It's a specific test protocol that the product needs to pass. And in the complaint John posted earlier, they allege that some group tested LL product in 2013 (IIRC) and found it did not pass. That group sent the test results to LL so LL was put on notice that their product did not meet CARB requirements. I believe the complaint said that the case from that testing is still pending. I don't remember everything from the complaint - I only skimmed it.

Legal things like this do not move at the "sound bite" pace of news media. Tests will be made, the results will be contested by one side or the other, and then more test will be done. It's going to take years before this is resolved.

Remember, the question is whether the product meets the CARB standards, not whether the level of formaldehyde is excessively high in any home. The levels of formaldehyde in homes is irrelevant to the situation LL finds themselves in.

Mike

[Todd Willhoit]

The sensational aspects of the story that may have been in the story (I didn't see the program) are not of interest to me because I know that those shows do such things to boost their ratings.

The important question is whether the company sold non-compliant material, and only testing by independent labs, to the testing standards set by the CARB, will establish that.

...

[Perhaps you feel that the people who first discovered the possible selling of non-CARB product should have alerted the authorities and not shorted the stock first. ]

If you are saying that the selling of products that are "possibly" non-CARB is sensational, then we agree 100%. However, in real life we deal with whether they are actually CARB or non-CARB. If it is only "possible" at this point, and prior complaints are still pending, then this thread should have died long ago without supporting facts. Everything is speculation.

Note that the complaint also states, "Similar products tested from Lumber Liquidators’ competitors also showed significantly lower formaldehyde levels that generally complied with the CARB formaldehyde emission standards." Either they comply or they don't. Who is the next competitor on the chopping block?

We also don't know who actually performed and paid for the prior testing. Was it truly independent?


Legal things like this do not move at the "sound bite" pace of news media.

Legal things do, but the market doesn't. That is why we should wait for some solid facts before LL becomes everyone's punching bag and all of the other investors take a hit. I wonder if anyone here has exposure directly or through a mutual find?

What about the "investors" shorting the stock? Are they "possibly" crooks? Is this a single play? Is shorting a stock and making accusations about an infraction the standard MO? Only time will tell.

I am interested in the story for two reasons: I, like you, care about our planet, and I also care about corruption in the US financial system. It appears certain that someone is gaming (my definition) our financial system by bashing a stock they have shorted. I haven't read everything, but that is the only fact I have read so far.

[Jerome Stanek]

Don't auto makers sell cars that are not Carb certified in states that don't use Carb

[Brian Holcombe]

If you are saying that the selling of products that are "possibly" non-CARB is sensational, then we agree 100%. However, in real life we deal with whether they are actually CARB or non-CARB. If it is only "possible" at this point, and prior complaints are still pending, then this thread should have died long ago without supporting facts. Everything is speculation.

Note that the complaint also states, "Similar products tested from Lumber Liquidators’ competitors also showed significantly lower formaldehyde levels that generally complied with the CARB formaldehyde emission standards." Either they comply or they don't. Who is the next competitor on the chopping block?

We also don't know who actually performed and paid for the prior testing. Was it truly independent?



Legal things do, but the market doesn't. That is why we should wait for some solid facts before LL becomes everyone's punching bag and all of the other investors take a hit. I wonder if anyone here has exposure directly or through a mutual find?

What about the "investors" shorting the stock? Are they "possibly" crooks? Is this a single play? Is shorting a stock and making accusations about an infraction the standard MO? Only time will tell.

I am interested in the story for two reasons: I, like you, care about our planet, and I also care about corruption in the US financial system. It appears certain that someone is gaming (my definition) our financial system by bashing a stock they have shorted. I haven't read everything, but that is the only fact I have read so far.

Look up Bill Ackman and Herbalife.

[Todd Willhoit]

Look up Bill Ackman and Herbalife.

Help me understand your point.

[Mike Henderson]

Help me understand your point.
Bill Ackerman shorted Herbalife big time and went public with his criticism of the company, calling them a something like a pyramid scheme (if I recall correctly). At first Herbalife shares went down, but then they came back up and Ackerman is losing his shirt. See story here (http://www.businessinsider.com/ackman-losing-money-on-herbalife-short-2015-3).

Short aren't always profitable, even if you go public with a criticism of the company.

Mike

[Todd Willhoit]

At first Herbalife shares went down, but then they came back up and Ackerman is losing his shirt.

I've read the story. I wonder how many innocent bystanders lost their shirt when the stock was down.

[Kent A Bathurst]

I've read the story. I wonder how many innocent bystanders lost their shirt when the stock was down.

If you are an "innocent bystander" playing with the big boys by shorting stocks, what you really are is a "sucker". One born every minute.

Every one of those guys should have lost their shirts - and their shorts - serves 'em right for trying to punch above their weight. Pick themselves up off the mat, go back to their corner, and take up table tennis as a sport instead.

[Mike Henderson]

I've read the story. I wonder how many innocent bystanders lost their shirt when the stock was down.
Well, in this case it appears that the investors, both large and small, are going to be okay if they rode through the choppy seas. But there is no guarantee when investing. Anything can happen in the market. For example, a successful pharmaceutical firm can be rocked by a report that their very profitable drug causes serious side effects, including death. Their stock is going to tank. A war could start in the middle east - all stocks are going to tank.

For all investors, the mantra is diversification - don't put all your eggs in one basket and invest for the long term. Allocate your funds so that you can survive if one of your investments loses half it's value. Investing is difficult and risky and those who enter the market have to be ready for the bad times as well as the good times.

Mike

[I've followed this story a bit and it seems that Ackerman is very sincere - he honestly believes that Herbalife is a pyramid scheme and that the company takes advantage of low income people. He certainly put a lot of money behind his belief. And it may well be true that Herbalife is a pyramid scheme - but it appears that it is not an illegal pyramid scheme.]

[Todd Willhoit]

Kent,
I am not suggesting that the innocent bystanders are shorting stocks. Maybe I wasn't clear in my earlier post, but I said that the "other investors take a hit" in a scenario like this. I AM suggesting that there are millions of citizens, the "other investors" (including Creekers), who are invested in all sorts of companies relatively unaware. IRAs, 401ks, 529s, and brokerage accounts are flush with mutual funds and other mixed-bag investments that hold securities like Herbalife and LL. Most people have no idea what they are invested in beyond terms like value, growth, small cap, large cap, etc. On top of that, 401ks often don't have much to choose from.

So, some high roller makes a power play and the average Joe's take the fall. Maybe they need cash to pay medical bills, or buy a house, or send a kid to college, and the security they need to sell is down a few percent, or a lot more due to manipulation like this. Can it happen via other natural market forces? Sure. But when it is driven by a small group of financially interested (interested in failure, that is) parties, it seems immoral.

I'm all for a free market, but "free", in my mind anyway, implies a level of morality.

[Todd Willhoit]

Mike,
It looks like we were typing at the same time and agree on natural market forces. Your pharmaceutical firm makes for a good example. A bad report isn't likely to come from a hostile investor, but rather an FDA or university study - an entity not financially connected.

[Kent A Bathurst]

Todd -

The modern market exchanges are dominated by firms with massive computers and huge bandwidth in the basement of the exchanges, programmed by an army of PHD's in economics and computer science.

No one can beat back that onslaught - the winners are denominated by a few milliseconds.

If you ain't one of those big dogs, don't leave the porch. A lot of 401(k) people like to think they will be able to figure out which managed investment account will "beat the market". Fool's gold.

Pick something like an S&P 500 index fund, and stay away from trading. Spread the risk. Invest wide. "Buy" the market. Read Malkiel's " A Random Walk Down Wall Street" - an oldie, but a goodie, which still holds today.

There are rascals out there, no doubt........but you should not be in a position where one of them can do you serious damage, unless you ARE one of them, in which case - run with it. While you can.

[Todd Willhoit]

Kent,
You are preaching to the choir, brother. Sadly, the vast majority of the US population has no idea that what you just posted is true, and wouldn't believe you if you told them. They are doing the best they can with what they know, and hope to have enough to make it through retirement.

[Kent A Bathurst]

Todd -

And managed accounts make their living off of that. Take what you have, dump it into a Vanguard S+P 500 account, with zero-point-15% or so fees, and ride the market. You cannot beat the market, in the long haul, so just be sure you don't fall behind it.

The sales and marketing people drum up customers by countering that simple fact.

So - some bozo is trying to short a stock and make a killing. Not news, other than it got into the news. Chart a course around those [potential] shoals.

If you get nervous about the overall market, dump it into a MM fund that might not give you any actual returns, but will preserve your capital until you feel comfortable with the overall market.

I won't subscribe to any position - not saying this is yours - that says "the investing public are idiots, so we need regulation and litigation to protect them". That road ends, ultimately, in massive train wrecks.

[Brian Holcombe]

I'm an investor (not in LL), I do so knowing that their are risks. I do not short stocks, but I do not begrudge those who do, it's simply part of the market and all aspects that are legal are going to happen. Your own morals and ideals are your own and yours alone, do not expect that capital systems work on ideals, they do not.

There are no 'innocent bystanders' there are those who expect the price to rise and those that expect it to fall and if they chose to act based on their opinion they are taking risk.

[Mike Henderson]

Here's (http://www.nbcnews.com/business/consumer/lumber-liquidators-pulls-all-chinese-made-laminate-flooring-n355201)an update on the continuing Lumber liquidators story.

Mike

[Mike Henderson]

Lumber Liquidator's CEO quit today. The stock fell 17% when the news came out. It's about $22, down from about $70 in February.

Mike

[Scott Shepherd]

We had people on this thread that had it in their homes and it was such an emergency to their family's health, they were going to do the testing.

Never heard another word about it. Either the testing was negative, or it wasn't that big a concern as it was when it was headline news.

[Mike Henderson]

We had people on this thread that had it in their homes and it was such an emergency to their family's health, they were going to do the testing.

Never heard another word about it. Either the testing was negative, or it wasn't that big a concern as it was when it was headline news.
Perhaps you haven't been following the news on Lumber liquidators. There's a significant number of suits that have been filed against the company. It's possible that the company won't survive.

Mike

[Jerome Stanek]

Perhaps you haven't been following the news on Lumber liquidators. There's a significant number of suits that have been filed against the company. It's possible that the company won't survive.

Mike

Just because there are law suits against them doesn't mean that they had a case against them. Lawyers will try to get a quick settlement to keep it out of court.

[Scott Shepherd]

Perhaps you haven't been following the news on Lumber liquidators. There's a significant number of suits that have been filed against the company. It's possible that the company won't survive.

Mike

Sure I have. I drive by their headquarters about once a month. Filing a lawsuit and winning one are two different things.

My point was, with all the hype about how dangerous it was, I have yet to see one single actual story of someone with it in their home where the readings were bad. "The sky is falling" was the mentality, and people talked about having to rip up their floors and replacement immediately and I just haven't seen or heard of that being done nationwide.

Remember the early posts in this thread? They were going to have to rip up the floor in millions of homes, immediately, to stop all this poisoning immediately.

Yet no one's come back to this thread and posted "We have it in our house, had it tested, and it was bad, so we are replacing it". Not a single person. That doesn't mean I don't think it's an issue, it's just a curious observation on my part.

[Mike Henderson]

I'm sure you're aware that we went through all of this earlier in the thread. The issue facing LL is whether their product met the standards, not what readings were in any homes. Please review the earlier threads which cover this in great detail.

Note that LL stopped selling Chinese product. While you're certainly correct that there's a difference between filing a suit and winning it, there's great cost in defending suits, especially the number of suits that have been filed.

And LL has already been tarred by the allegations, which is going to affect their ability to prosper and grow. The news of the CEO quitting was received by the market as negative news.

I see a long and difficult road ahead for LL. I wonder if they will survive. It's clear that a lot of investors wonder the same thing. It's unlikely that anyone would acquire them with the suits hanging over them.

Mike

[If any of you think this is all just air and is going to blow over, put your money where your mouth is and buy some of the stock. If you're right, you'll make a killing.]

[Scott Shepherd]

I seriously doubt they'll survive. If they do, it will be because someone comes in buys them, rebrands the entire company and starts with a fresh face (that's actually what THEY should do).

I'm just still skeptical that this was about anything other than someone trying to destroy the company's stock price, since there's been zero claims that I can find, where anyone's actually getting positive readings in their actual homes.

[Phil Thien]

I seriously doubt they'll survive. If they do, it will be because someone comes in buys them, rebrands the entire company and starts with a fresh face (that's actually what THEY should do).

I'm just still skeptical that this was about anything other than someone trying to destroy the company's stock price, since there's been zero claims that I can find, where anyone's actually getting positive readings in their actual homes.

What they should have done from the start was attack the standards.

They should admit they screwed-up, but then demonstrate it doesn't really matter, that the testing indicates that within months, the floors are fine and safe and actually are higher quality and longer-lasting due to the superior adhesive quality BECAUSE of the formaldehyde.

The thing is, to inflict any damage via a lawsuit (other than driving the stock price down), you have to prove damages. If the air in the homes is fine, where are your damages?

So I would have gone on the offensive early-on, just rip the standards apart.

[Peter Kelly]

Their CFO, Daniel Terrell, will also be out on June 1.

Crappy Chinese flooring aside, Lumber Liquidators also sucks for a whole slew of other reasons; generally low-end products, poor customer service, hidden fees everywhere, etc. Won't be sad to see them go.