Lumber Liquidators Holdings Inc (NYSE:LL) shares were rising early in the day as the company settled a class-action lawsuit.
The company has agreed to a $36 million settlement to resolve claims that were brought forth on behalf of its Chinese-manufactured laminate flooring that reportedly contained unsafe levels of formaldehyde.
Lumber Liquidators said on Tuesday that it had signed a memo that proved it understood the settlement of all claims in two class-action lawsuits for the aforementioned amount with the Eastern District of Virginia.
The company will shell out $22 million in cash, as well as offering $14 million in store-credit vouchers to consumers who bought the flooring between January 2009 and May 2015, when it stopped selling the product.
The company said the move was “an important step toward resolving this legacy issue and moving forward,” according to CEO Dennis Knowles in a statement. “We think consumers will get a good value by getting cash or store vouchers to buy other products from Lumber Liquidators,” Toll said.
The lawsuits were brought forth in May 2015 during a 60 Minutes report that showed that the laminate flooring made in China had illegal levels of formaldehyde.
Exposure to high levels of the chemical can cause respiratory problems and irritation of the eyes, nose and throat, while also increasing a person’s risk of developing cancer.
LL shares fell less than 0.1% Wednesday.