LL Flooring Mails Letter to Shareholders Highlighting Thomas Sullivan’s Conflict of Interest and Personal Agenda in Proxy Contest
Emphasizes the Company’s Director Nominees are Highly Qualified and Engaged, and their Election is in the Best Interest of All Shareholders
Urges Shareholders to Vote the Universal WHITE Proxy Card Today “FOR” ONLY
Visit www.VoteLLFlooring.com for More Information
The letter contains critical information for shareholders’ decision making, including highlighting the Board’s view that
The LL Flooring Board of Directors unanimously urges shareholders to vote using the universal white proxy card today “FOR” only LL Flooring’s three highly qualified director nominees.
Visit www.VoteLLFlooring.com, to find additional information and resources to help shareholders vote at the 2024 Annual Meeting of Stockholders.
The full text of the letter follows:
Dear Fellow Shareholders,
We are seeking your support at LL Flooring’s upcoming 2024 Annual Meeting of Stockholders for our three highly qualified nominees –
The costly and distracting proxy contest that has been launched by
We urge you to support your Board by voting the universal WHITE proxy card today “FOR” ONLY LL Flooring’s three highly qualified director nominees –
Based on Mr. Sullivan’s actions during the Company’s strategic review process and even more recently, we believe that his focus would be to push a personal agenda to acquire
While
In addition to questioning Mr. Sullivan’s true motives, we encourage shareholders to ask themselves if an individual with Mr. Sullivan’s track record should be overseeing LL Flooring’s path forward. Some of the “highlights” in Mr. Sullivan’s history include:
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In 2013,
Mr. Sullivan was the subject of a civil racketeering derivative complaint filed by condominium and hotel associations inMiami bankruptcy court on behalf of all debtors ofElcom Hotel & Spa LLC , whichMr. Sullivan co-founded. The bankruptcy clawback lawsuit sought more than$20 million for Mr. Sullivan’s actions involving his ownership of 51 units and the common areas ofBal Harbour Hotel & Spa . The lawsuit accusedMr. Sullivan of fraud, racketeering, gross negligence and breach of fiduciary duty, among other counts, for his personal use of funds that were intended to be allocated for building operations.
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In 2013, while
Mr. Sullivan served as Executive Chairman ofLL Flooring (thenLumber Liquidators ) the government served search warrants on the Company related to an investigation into environmental crimes. InOctober 2015 , afterMr. Sullivan had stepped into the role of Interim CEO following the departure of the previous CEO, the Company pleaded guilty in federal court to charges related to its sourcing of illegally logged timber from Far East Russia, as well as false statements on Lacey Act declarations which concealed the true species and source of the timber. This was the largest criminal fine ever under the Lacey Act at the time.
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In
March 2015 , whenMr. Sullivan was serving as Executive Chairman,LL Flooring (thenLumber Liquidators ) was also the subject of a 60 Minutes exposé regarding claims that the laminate flooring imported by the Company fromChina had unsafe levels of formaldehyde.Mr. Sullivan chose to appear on the program as a spokesman for the Company, and following the airing of the program, the Company experienced significant negative impact to its stock price and reputation. In this same timeframe, the Company was also the target of a class action lawsuit, and the California Air Regulation Board started an investigation into the Company’s products.
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In 2019, three years after his departure from the Company as a director and executive,
Mr. Sullivan made public statements about his interest in acquiringLL Flooring . He then reversed those statements while timing his trades ofLL Flooring stock in a manner that benefitted his own personal portfolio and whipsawed other investors.Mr. Sullivan disclosed he had increased his stock ownership inLL Flooring (thenLumber Liquidators ). Shortly thereafter, he publicly expressed interest in taking the Company private through a transaction withCabinets To Go , which led to a significant increase in the stock price. Shortly after,Mr. Sullivan sold down his stock ownership after which he made a subsequent public statement noting he was no longer interested in acquiring the Company, which sent the stock price down after he had already profited from his stock sales.
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In 2019, Mr. Sullivan’s company,
Cabinets To Go , was involved in litigation withLL Flooring related toCabinets To Go violating the terms of a Memorandum of Understanding signed between the companies under whichCabinets To Go would not sell flooring in competition withLL Flooring .Cabinets To Go later settled withLL Flooring regarding the violation of terms.
As a result of actions taken by prior management while serving under the oversight of
LL Flooring’s Highly Qualified and Engaged Nominees Are the Right Directors to Oversee the Company’s Path Forward and Maximize Value
We firmly believe that LL Flooring’s current directors are the right directors with the right experience and skillsets to oversee the Company’s strategic direction and to maximize value.
Consistent with your Board’s commitment to independence, eight of LL Flooring’s nine directors – all but the Company’s CEO – are independent, including all three nominees who are up for re-election at this year’s Annual Meeting. In addition to ensuring true independence, your Board is committed to ongoing refreshment, as evidenced by the voluntary replacement of nearly one-third of your Board over the last five years.
Most recently, this deliberate and thoughtful group has supported management’s definition and initial execution of the Company’s five clear strategic priorities along with the ongoing thorough consideration of strategic alternatives.
We strongly encourage shareholders to vote for LL Flooring’s three directors who are up for re-election:
Former Chairman and CEO of CleanCore Solutions, Inc.; Former CEO of 1847 Goedeker, Inc. and Goedeker’s
Through his more than 25 years of merchandising and retail experience,
Current Chief Information Officer of
Current LL Flooring Independent Board Chair; Former CEO of Tredegar Corporation
Public company director at TopBuild Corp. and Malibu Boats, Inc.
Over the course of their respective tenures as members of your Board, Messrs. Moore and Parmar and
Vote today “FOR” ONLY LL Flooring’s three highly qualified and engaged director nominees on the universal WHITE proxy card
Your Board unanimously recommends that you vote “FOR” the election of each of the three nominees proposed by your Board, Messrs. Moore and Parmar and
Your Board does not endorse
Your vote is very important. Even if you plan to attend the Annual Meeting, we request that you read the proxy statement and vote your shares by signing and dating the enclosed universal WHITE proxy card and returning it in the postage‐paid envelope provided or by voting via the Internet by following the instructions provided on the enclosed universal WHITE proxy card.
If you have any questions or require any assistance with voting your shares, please contact our proxy solicitor, Saratoga, at (888) 368‐0379 or (212) 257‐1311 or by email at |
Additional Information
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Learn More about
- Our commitment to quality, compliance, the communities we serve and corporate giving: https://llflooring.com/corp/quality.html
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Forward Looking Statements
Certain statements in this press release may include statements of the Company’s expectations, intentions, plans and beliefs that constitute “forward-looking statements” within the meanings of the Private Securities Litigation Reform Act of 1995. These statements, which may be identified by words such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “assumes,” “believes,” “thinks,” “estimates,” “seeks,” “predicts,” “could,” “projects,” “targets,” “potential,” “will likely result,” and other similar terms and phrases, are based on the beliefs of the Company’s management, as well as assumptions made by, and information currently available to, the Company’s management as of the date of such statements.
These statements are subject to risks and uncertainties, all of which are difficult to predict and many of which are beyond the Company’s control. These risks include, without limitation, the impact of any of the following: reduced consumer spending due to slower growth, economic recession, inflation, higher interest rates, and consumer sentiment; our advertising and overall marketing strategy, including anticipating consumer trends and increasing brand awareness; the results of our ongoing strategic review; a sustained period of inflation impacting consumer spending; our inability to execute on our key initiatives or if such key initiatives do not yield desired results; stock price volatility; competition, including alternative e-commerce offerings; liquidity and/or capital resources changes and the impact of any changes or limitations, including, without limitation, ability to borrow funds and/or renew or roll over existing indebtedness; transportation availability and costs, including the impact of the war in
The Company specifically disclaims any obligation to update these statements, which speak only as of the dates on which such statements are made, except as may be required under the federal securities laws.
Additional factors are set forth in the Company’s Annual Report on Form 10-K and Form 10-K/A for the year ended
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1 Based on Company SEC filings filed on |
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For further information:
LL Flooring Investor Relations
ICR
ir@llflooring.com
Tel: 804-420-9801
For media inquiries:
212-355-4449
For Investors:
info@saratogaproxy.com
Tel: 212-257-1311
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