Third man floored

Lumber Liquidators exodus rolls on

Lumber Liquidators ousted its merchandising chief on Monday, just weeks after he was fingered in a shareholder lawsuit as the “goto guy” for the company’s controversial Chinese operations.

William Schlegel, who spent four years in the position, will work his last day at the Toano, Va., operation on June 19, the company said in a regulatory filing.

Shares of the retailer, down 69 percent since Feb. 25, when CBS first announced its “60 Minutes” program would detail allegations that some of the chain’s laminate flooring contains dangerously high levels of formaldehyde, closed Monday at $ 21.48, off 1 cent.

Schlegel was named the “goto guy” by confidential witnesses in a securities classaction lawsuit filed in Virginia federal court on May 20. The lawsuit alleges Lumber Liquidators execs were engaged in a fraud to boost gross margins by buying cheaper products that were either toxic or illegally obtained.

In addition to Schlegel, former CEO Robert Lynch, former CFO Daniel Terrell and Chairman and acting CEO Tom Sullivan were named in the suit.

Lynch and Terrell have already left the company.

Undercover videos on “60 Minutes” showed Chinese workers claiming the mills violated US standards under instructions from the company.

Lumber Liquidators is under investigation by multiple state and federal authorities regarding the formaldehyde issue and faces more than 100 consumer lawsuits.

All of Lumber Liquidators’ Chinese buyers reported to Schlegel, who was responsible for quality assurance, the lawsuit alleged.

“Schlegel traveled to China frequently to oversee operations, find new Chinese suppliers, and reported back his findings” to former CEO Lynch, one confidential witness said.

Lynch left abruptly May 21 — the day after the lawsuit was filed.