Background: On May 21st, Bloomberg reported the abrupt resignation of Robert Lynch as CEO of Lumber Liquidators Holdings Inc. The move came as fallout from a “60 Minutes” report claimed the company sold laminate flooring containing toxic levels of formaldehyde.
By Gary Gerdemann
It’s painful. Watching these events unfold in some sort of corporate slow motion. As executives quit, analysts downgrade, share price plummets and spokespeople tiptoe around fundamental questions, it is easy to imagine all of this as the death writhings of a crippled dinosaur.
The internal conversations are surely centered around what not to say to avoid creating evidence in product liability and shareholder suits. Everyone is scared. Scared of losing a job, a company, a livelihood.
At this moment, the lawyers are in charge. Internal counsel. External counsel. Regulatory agency attorneys. Plaintiffs attorneys.
Lawyers can’t save this company. As with doctors and nurses for Ebola patients, they can only provide care to support the patient. They don’t know how to beat the virus. Perhaps the founder, Thomas Sullivan, can save this patient rather than rely on a CEO willing to join the company at its darkest hour.
What Mr. Sullivan can say and do right now is important. It may save the company. Every lawyer will oppose it.
He can begin by saying what every homeowner who owns Lumber Liquidator flooring is thinking. “I know you’re concerned. Me, too. I have the same flooring in my home where my kids play. Here’s what we’re doing. We’ve hired prominent medical researchers and doctors who are looking at this matter right now. When they are done, we will tell you exactly what they tell us. We have also directed them to release their report directly to you and the media. We don’t think that our flooring will cause any health issues. I believe our flooring is safe in your house just as I think it is safe in my house. But, we’re not taking any chances because we heard your concerns.”
That would be a good first step. Instead, they are still in denial. Front page of the LumberLiquidators.com web page today is a customer appreciation sale. A customer has to click through several pages to find even a slight mention of an air quality test.
Rip the Bandaid off, Lumber Liquidators. If the flooring is dangerous, you’ll make it right. If not, you’ll spend your last dollar to tell every man, woman and child in America so they can feel better about it.
But, this will not happen in America the litigious.