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Party City declares bankruptcy, closing 700 stores, including 18 in Va.

Party City filed for bankruptcy Saturday and said it would “commence a wind down of its retail and wholesale operations and going out of business sales at its approximately 700 stores nationwide,” including 18 stores in Virginia.

The company just came out of bankruptcy in September, after bringing on a new CEO, Barry Litwin, in August. Party City Holdco, the retail chain’s holding company, was able to cancel about $1 billion in debt through the restructuring, according to Saturday’s announcement.

Word of Party City’s plans to shutter all of its stores came out Friday, when Litwin told corporate employees that they would soon be closing down all of the retailer’s 700-some party supply stores across the country, and that Friday would be corporate staffers’ final day of employment, according to a CNN report.

That means 18 Party City stores in Virginia will close soon, after about 40 years in business. However, there is a silver lining for employees of two stores in the Richmond area that will remain open because they are independently owned by a franchisee.

Steve Fram, the owner of two stores on West Broad Street in Henrico County and Stonehenge Village in Chesterfield County, said Monday that his stores will remain open and are not involved in the corporate shutdown. His two stores are among 29 franchise Party City stores across the country that are run independently and the only two independent franchisees in Virginia, he said.

Nonetheless, Fram said he’s fielded lots of phone calls, texts and questions about his stores’ status from his 40 employees and customers. “Everyone’s asking questions, ‘What’s going on?'” he said. “I found out about this Thursday morning, [and] I still haven’t received any information from corporate.”

The primary change will be to the stores’ point-of-service system, which is run through the Party City company, and the 29 franchise stores are working together on an independent procurement group to purchase items sold in their stores. “For the time being, we’ll be under the Party City name,” said Fram, who’s owned his stores for about 30 years.

CNN reported that some store employees received letters that the company planned to close stores Feb. 28, 2025, at which point their staffs would be terminated. Employees will not receive severance pay, and their benefits will end as the company goes out of business, Litwin said in a video call with corporate employees Friday, according to CNN.

Litwin joined the New Jersey-headquartered company as president and CEO only four months ago, and Party City exited bankruptcy in September, having declared bankruptcy in January 2023 and canceling nearly $1 billion in debt. According to CNN, the company, which was founded in 1986, still had more than $800 million in debt late this year, which earnings couldn’t overcome.

“I am excited to join Party City at a pivotal time as we reposition the business for a stronger future,” Litwin said in a statement in August announcing his hiring. “Party City is a leader in party goods and supplies, and I see many opportunities to strengthen our financial performance and build a leading end-to-end celebration experience for consumers. I look forward to working closely with our team members, the leadership team, and the board of directors to create value for all our stakeholders.”

Party City is the nation’s largest party supply store, but the combination of the pandemic, rising costs and a helium shortage all hurt its business, CNN reported.

There are 20 Party City stores in Northern Virginia, the Richmond area, Hampton Roads, Lynchburg, Roanoke and Winchester.

Dollar Tree CFO stepping down

Dollar Tree Chief Financial Officer Jeff Davis is leaving the Chesapeake discount retailer after two years, the company announced Wednesday. Davis will stay through the filing of the company’s fiscal 2024 report to the Securities and Exchange Commission, Dollar Tree said.

“We thank Jeff for his service and appreciate the contributions he made to the business during his time with Dollar Tree and Family Dollar. We remain committed to our business strategy and are focused on driving lasting value for our customers and shareholders,” interim CEO Michael C. Creedon Jr. said in a statement.

Davis’ departure comes after former CEO and board chairman Rick Dreiling stepped down in November, citing health issues.

Davis was hired following a C-suite shakeup in 2022, with Creedon coming aboard as chief operating officer, among other hires. Dreiling, too, was hired in 2022, replacing former CEO Mike Witynski.

A graduate of Penn State and the Katz Graduate School of Business at the University of Pittsburgh, Davis was previously treasurer of Walmart and served as CFO for JCPenney as well as Qurate Retail Group, the conglomerate that owns QVC, HSN and Zulily.

Davis’ departure was announced Wednesday alongside Dollar Tree’s third-quarter results and the retailer’s full-year outlook for fiscal 2024; the company said it anticipates net sales of $30.7 billion to $30.9 billion for the year, slightly up from $30.6 billion in revenue reported last year. In the third quarter, consolidated net sales increased 3.5% to $7.56 billion, compared with the third quarter of 2023.

The company has closed approximately 670 of its Family Dollar stores this year, and expects to close 25 more by the end of the fiscal year, and continues to explore a potential sale or spinoff of the Family Dollar business segment, it said Wednesday. A Fortune 500 company, Dollar Tree operates more than 16,000 stores in the United States and Canada.

LL Flooring CEO resigns, effective immediately

LL Flooring President and CEO Charles E. Tyson has resigned effective immediately, the Henrico County flooring company formerly known as Lumber Liquidators announced in a Securities and Exchange Commission document released Friday.

The move is not exactly a surprise, coming several weeks after Thomas Sullivan, Lumber Liquidators’ founder and former CEO, purchased 219 LL Flooring stores, which he said he would keep operating — but renamed as Lumber Liquidators.

LL Flooring filed for Chapter 11 bankruptcy in August, and an entity connected to investor F9 Group, owned by Sullivan, purchased the stores for $44.5 million in cash and at least $22 million in assumed liabilities. QTS Data Centers, meanwhile, purchased LL Floorings 995,792-square-foot distribution center on 97.55 acres in the White Oak Technology Park for $104.75 million in September.

Tyson was appointed president and CEO of LL Flooring in May 2020 and joined the company’s board at that time, after having been interim president starting in February 2020, and before that, chief customer experience officer. From 2008 to 2017, he served in executive roles at Advance Auto Parts, and previously was a senior vice president at Office Max and Office Depot.

He renamed the company LL Flooring in 2021, after the company was fined $33 million in 2019 by the federal government for continuing to sell laminate flooring after it failed formaldehyde emissions tests in California. Sullivan, who founded Lumber Liquidators in 1994, departed in 2016 after appearing on a 2015 “60 Minutes” investigation into the laminate flooring.

In 2022, LL Flooring opened 17 stores, but sales dropped the following year. Net sales in 2023 were down 18.5% from 2022, from $1.11 billion to $904.7 million. LL Flooring closed eight locations and opened three in 2023, and net losses last year amounted to $103.5 million, a large increase from a net loss of $12.1 million in 2022.

The Sept. 6 announcement of the sale of 219 stores and closing of 211 others came only hours after an earlier announcement that all of the stores would shut down, as LL Flooring said it had not found a purchaser.

Fed’s Fifth District economy grows modestly

Map courtesy Federal Reserve Board

Economic activity in the Federal Reserve’s Fifth District (a multistate region including Virginia, North Carolina, South Carolina, West Virginia and Maryland) grew modestly from early September, according to the latest edition of the Fed’s Beige Book, released Wednesday.

Published eight times per year, the Beige Book is based on anecdotal information about economic conditions gathered from the nation’s 12 Federal Reserve Banks. It is compiled from reports by bank and branch directors, as well as information gathered from business contacts, economists, market experts and other sources. The October release is an update from the Fed’s Sept. 4 report.

Here’s what the most recent Beige Book edition revealed about the direction the economy is taking:

Employment in the Fifth District increased slightly in the most recent reporting period. Although many businesses reported improvements in the labor pool and moderate wage growth, some firms reported continued challenges finding specific types of workers; they increased wages more and used outside help to attract those workers.

One example is a charter bus company that reported better driver availability but said it had to “dramatically” increase wages to attract skilled mechanics. A lighting manufacturer said it raised hourly wages by $2 for production workers.

Additionally, Hurricane Helene’s effects led to a spike in initial unemployment insurance claims in North Carolina in the first week of October.

Price growth in the region continued to ease slightly in recent weeks, according to the Fed. Prices grew at a “modest to moderate rate” year-over-year. The prices that manufacturing firms received grew modestly compared to the previous year, while service providers saw moderate annual price growth. Some consumer-facing businesses said they believed customers wouldn’t accept further price increases.

Manufacturing activity ranged from flat to slightly up for some producers. Some producers reported an increase in orders — a fuse panel manufacturer, for example, reported a backlog going into 2025 because of large recent orders. Nevertheless, some respondents reported delays on new orders because of uncertainty, like a textile manufacturer that reported it expected tepid demand as customers were being cautious ahead of elections.

Fifth District ports reported a slight increase in containerized cargo volumes while they allowed for additional trucking traffic to offload ships in advance of the anticipated International Longshoreman’s Association worker strike on Sept. 30. The strike lasted three days and was suspended until Jan. 15, 2025. The 45,000 union workers involved included 6,000 workers at Fifth District ports.

Port respondents said the three-day strike had little impact on operations because of its brevity. They also expected the resulting wage increases to affect future container rates.

Trucking demand remained flat, and companies expected it to stay muted going into winter. Trucking firms reported that profitability was down because freight spot rates fell.

Consumer spending in the region picked up modestly over the most recent reporting period. Retailers reported an increase in sales and shopper traffic. Some respondents said that revenues were up despite flat transaction volumes because prices were higher.

Hotel and tourism contacts said business travel increased, but leisure travel slowed. One hotel representative attributed the slowdown partly to the active hurricane season. Respondents in western North Carolina were still assessing Hurricane Helene’s damage and impacts, but most said they expected to feel the storm’s impacts for several months.

Fifth District residential real estate had a slight downtick in recent weeks, which many real estate agents attributed to a typical fall slowdown and the hold for rate cuts.

A Virginia agent said housing inventory was rising, particularly with fixer-uppers and less-than-ideal homes coming on the market. According to Virginia Realtors data, in September, Virginia had 19,764 active listings and 11,378 new listings, both year-over-year increases.

Contacts across the Fifth District also mentioned lawsuits and continued uncertainty related to the National Association of Realtors policy changes.

Commercial real estate activity leveled off in the past month, according to the Fed. Although vacancy continued to grow in lower-grade markets, vacancies decreased in prime A spaces. A residential and metal buildings construction company in Virginia said it had fewer potential customers and that clients were having more difficulty affording the company’s work.

Also, Hurricane Helene caused severe destruction of commercial and residential properties in western North Carolina and Virginia, but the extent of the damage isn’t yet clear, the Fed said.

Financial institutions saw a modest increase in loan demand, driven mainly by interest rate cuts. Commercial real estate and first mortgage refinancings were the main drivers of the increased demand. Deposit levels remained stable. Loan delinquency rates remained stable, although lenders reported a continued modest decline in borrowers’ credit quality.

Nonfinancial service providers continued to report little change in demand to the Fed, and their revenues remained stable. One law firm said they anticipated a modest increase in merger, acquisition and real estate deals because of decreasing interest rates. Some contacts reported they thought economic activity was constrained because clients were hesitant to make new investments or business decisions until uncertainty about the presidential election and international conflicts was resolved.

Trump Town owner calls assault, indecent exposure charges ‘fake news’

Donald “Whitey” Taylor, owner of Trump Town, a Boones Mill store dedicated to merchandise celebrating the 45th president, and a candidate for mayor in that same small town, was arrested Tuesday on charges of indecent exposure and assaulting store employees. 

Taylor, 74, sent a text to Virginia Business, describing the criminal charges against him as “election interference.”

“Fake news,” he wrote. “I did not do anything they accuse me of, OK? Not guilty.”  

Taylor, who opened Trump Town in 2020, faces three charges of misdemeanor simple assault and one charge of misdemeanor indecent exposure. The charges were taken out by three women, all employees of Trump Town, on Oct. 22 through the magistrate’s office. The charges were not part of a law enforcement investigation, according to Sgt. Megan Huston, public information officer for the Franklin County Sheriff’s Office

Franklin County Speedway owner Donald “Whitey” Taylor opened his Trump Town store in the former Boones Mill Christian Church building in 2020. Photo by Natalee Waters

Taylor was arrested Tuesday, processed and released on a recognizance bond, Huston stated.  

“The Office of the Sheriff has assigned an investigator to reach out to the victim(s) to get statements related to these charges,” Huston said in a statement Friday. “This remains an active investigation at this time.”

Taylor is scheduled to be arraigned on the charges in Franklin County General District Court on Oct. 30. 

One woman, an employee at Trump Town, wrote in a criminal complaint that, on or around Sept. 26, Taylor called her to the back of the store, where he exposed himself and asked her to perform a sex act. The woman also noted that on Oct. 13, Taylor grabbed her buttocks. “He has repeatedly sexually, mentally, emotionally and physically, verbally harassed me,” the woman wrote.

In another criminal complaint, a woman wrote that, on Oct. 15, Taylor “grabbed my arm and shoved his hand in my pants and restrained me,” adding that Taylor has “continually verbally abused me and other co-workers for months and years.”  

A third woman wrote in a criminal complaint that Taylor grabbed her breast when she asked for her paycheck.

Taylor also owns Franklin County Speedway, which is now operated by one of his sons. 

Boones Mill had a population of 259, as of the 2020 census. U.S. Route 220, which runs through the town, is populated with political signs for the mayoral race. A house sitting adjacent to the busy road has a shed with a spray-painted message reading, “Hell no to Whitey Taylor for mayor.” 

Taylor is running against the incumbent town mayor, Victor E. Conner. Both candidates are running as independents.

In a statement, Conner expressed support for the women who filed the charges but declined to comment on Taylor’s arrest. 

“I will not stoop to that level to undermine my opponent or anyone else,” Conner said in a statement. “My integrity and character speak for itself and will continue to move forward putting family values and traditions first.”

Bassett reports Q3 loss, with performance hurt by cyberattack

Bassett Furniture reported $75.6 million in consolidated third quarter sales, a 13.3% decline from last year and a 9% drop from last quarter. It also recorded an operating loss of $6.4 million, its fifth consecutive loss. The overall loss included a $1.2 million loss on a logistical services contract the company chose to abandon to help it save costs.

Net wholesale sales fell 16% to $47.8 million, while retail sales fell 9.6% to $47.3 million.

Gross margin was 53%, which included $600,000 in manufacturing wages paid during a one-week manufacturing shutdown in July due to a cyberattack. Excluding the wage charge, gross profit margin would have been 53.8%, a 1.1% increase over last year.

“The integration of our industry, with the weak housing market, continued to pressure sales during the quarter,” CEO Rob Spilman said on an earnings call last week. “Although mortgage rates started to ease since the Fed’s 50 basis point rate cut three weeks ago, overall housing affordability and inventory affordability remain impediment in the short term.”

Besides the cyberattack, Spilman highlighted two other external events that impacted the quarter: Hurricane Helene and the East Coast port strike.

“Many customers and employees were deeply affected by the hurricane,” he said. “It impacted our distribution center in Catawba County, North Carolina, which was shut down to damage and power outages in the first week of October. We have recovered as quickly as possible. The longer-term impact on logistics and distribution is related to the damage to the I-40 infrastructure, which is our main route to the West. And while the East Coast dock strike was just three days, the impact on our business has pushed shipments back one to two weeks.”

Revenue in both segments was down, with greater pressure on retail, due to a higher level of fixed costs, Spilman said.

“Heading into the quarter, our Memorial Day event and Fourth of July event produced increases over last year, but the ‘in-between’ weeks were especially difficult as consumers stayed on the sidelines,” he said.

The 9% drop in wholesale sales was attributable primarily to a 22% decrease in shipments to the open market, a 13% drop in shipments to its own retail stores and a 6% drop in lane venture shipments. Gross margin rose 50 basis points, primarily due to improvements in club leather.

In retail, despite a 5% sales drop, gross margin improved due to “higher home delivery income and better margin on clearance inventory.” Spilman said the average retail ticket was $3,900, up 5%.

Inventories were down more than $10 million year-over-year, and slightly down sequentially, which Spilman says reinforces the company’s belief that it can run with leaner inventory.

Finally, the company highlighted its ongoing restructuring plan, which should help save costs of between $5.5 million and $6.5 million per year starting in fiscal 2025.

“We are running a leaner operation, reducing expenses and investing in new products and services,” Spilman added. “We are committed to returning to profitability.”

Boones Mill store plays Trump card

The red, white and blue Trump Town sign hanging high upon a former Boones Mill church is as prominent as a sign can be without being lit by neon. But in case drivers passing through town somehow miss it, there’s also a 15-foot cutout of a smiling Donald J. Trump leaning up against the building, which once was home to Boones Mill Christian Church and, later, Freemasons before transforming in 2020 into a retail store packed with merchandise celebrating the 45th president.

It’s a spectacle so grand, locals bring their out-of-town friends and relatives, brags Trump Town owner Donald “Whitey” Taylor. On a Friday in August, Susan Whitaker of Rocky Mount and her friend Louie Carbaugh, who was visiting from California, came to marvel at the shop at U.S. 220 and Bethlehem Road. “I’ve never seen a Trump store around L.A.,” Carbaugh says. 

Boones Mill Town Manager B.T. Fitzpatrick doesn’t believe Trump Town has made a significant impact on tourism in the area. “It’s pretty much been the same, other than the fact that some people just come by just to see it,” he says.

However, there have been some complaints about the dozens of Trump signs found on the lawn of  Trump Town. Not long after the Trump-themed store opened, town officials sent Taylor a letter noting that he was violating the town’s sign ordinance.

“We have not taken any code enforcement action on [Taylor] because, and this is where it gets kind of complex, his signs are his merchandise,” explains Fitzpatrick. “So, if I make him take all his signs down and put them inside his building, then I have to go to all the other businesses that have outdoor merchandise and tell them to do the same thing.”

Taylor, 74, also owns Franklin County Speedway, where he built a reputation for boosting racing attendance by staging pig races, mud wrestling matches and wet T-shirt contests. To increase foot traffic at Trump Town, Taylor set up a pen outside the store for three donkeys (dubbed Kamala, Hillary and Pelosi) but later rehomed them after deciding the smell might drive away customers.

Even without burros, business is good, says Taylor, who won’t disclose revenue. “I’m eating really good out of this,” he says. “I eat steak, even though … [the price is] so high with Biden in office.” 

Trump Town’s four part-time employees have sold dozens of pairs of $199 gold Trump sneakers, but hats and flags remain the store’s bread-and-butter, notes Taylor, who says the store saw between 60 to 90 customers an hour immediately following the July 13 assassination attempt against Trump. 

A proud attendee of more than 50 Trump rallies, Taylor claims to have spoken with the former president on three occasions.

Trump, Taylor tells customers, sent his helicopter pilot to scope the store, but the U.S. Secret Service vetoed the visit. (Asked for comment, a Secret Service spokesperson states that the agency “has no record of a request for former President Trump to visit Boones Mill.”)

Regardless of the presidential election’s outcome, Taylor, who is currently running for mayor in Boones Mill, thinks demand for Make America Great Again ballcaps won’t be diminishing anytime soon.

“This store will still sell merchandise 20 years from now,” he says.  

Judge approves LL Flooring’s sale of Sandston plant, assets

A Delaware Bankruptcy Court judge on Monday approved the sale of 219 LL Flooring stores to an entity connected to F9 Group, which is owned by Lumber Liquidators founder and former CEO Thomas Sullivan. The court also OK’d the $104.75 million sale of the bankrupt flooring company’s eastern Henrico County distribution center to an entity connected to data center giant QTS Data Centers.

The transaction between Henrico-based LL Flooring, which filed for Chapter 11 bankruptcy in August, and purchaser LumLiQ2 and guarantor F9 Investments is expected to close by Sept. 30, according to court documents. The two parties reached a last-minute deal earlier in the month after LL Flooring — formerly known as Lumber Liquidators — announced it would be closing all of its 400-plus stores nationwide. Instead, 211 stores will close over the next few months, according to the company. In a court document filed Sept. 3, F9 offered LL Flooring $44.5 million in cash at closing and at least $22 million in assumed liabilities in a $66.5 million bid this summer, and the company also said it had paid a deposit of $4.1 million toward the total purchase.

SNA NE LLC, a limited liability corporation connected with QTS Data Centers, reached an agreement in September to purchase LL Flooring’s 995,792-square-foot distribution center on 97.55 acres in the White Oak Technology Park for $104.75 million. QTS owns much of the technology park property, as well as all 622 acres of White Oak Technology Park II. In a separate ruling, U.S. Bankruptcy Judge Brendan Shannon approved that deal too.

According to the Associated Press, Sullivan said that the stores purchased by F9 will be renamed Lumber Liquidators, and that the stores will align with Cabinets to Go, one of F9’s brands.

Sullivan founded Lumber Liquidators in 1994, and he departed in 2016, after a 2015 “60 Minutes” investigation into allegations that laminate flooring produced in China and sold by Lumber Liquidators in the United States had violated California Air Resources Board regulations and failed tests for maximum formaldehyde emissions, even after California authorities notified the company of the issue in 2013 and 2014. In 2019, the U.S. Department of Justice fined the company $33 million to settle allegations of securities fraud, which also included a $6 million payment to the U.S. Securities and Exchange Commission.

In 2020, Charles E. Tyson became the company’s president and CEO, and renamed the company LL Flooring in 2021. In 2022, the business opened 17 stores, but sales dropped the following year. Net sales in 2023 were down 18.5% from 2022, from $1.11 billion to $904.7 million. LL Flooring closed eight locations and opened three in 2023, and net losses last year amounted to $103.5 million, a large increase from a net loss of $12.1 million in 2022.

Last year, Sullivan purchased 9.4% of LL Flooring stock, and F9 attempted to purchase LL Flooring to merge with Cabinets to Go, but LL’s board rejected the deal. However, in July, Sullivan, F9 Brands President and CEO Jason Delves and Jill Witter, a Texas-based legal consultant for F9 Investments, were elected to LL Flooring’s board in a proxy war. The three resigned from the board as F9 and LL Flooring neared a deal on September’s acquisition agreement.

LL Flooring to sell 219 stores; 211 other stores set to close

Henrico County’s LL Flooring, which declared Chapter 11 bankruptcy last month, has signed an agreement to sell 219 stores and other assets to F9 Investments, the company announced Sept. 6. LL Flooring plans to close 211 other stores nationwide, up from 94 stores previously announced.

With this agreement, F9 Brands owner Tom Sullivan, the founder and former CEO of Lumber Liquidators and founder of Cabinets to Go, will likely assume ownership of the 219 LL Flooring stores, the company’s name and other assets by the end of the month, following approval by the Delaware Bankruptcy Court.

Earlier on Friday, Sept. 6, LL Flooring announced that it had not found a purchaser and planned to close all of its stores over the next three months, but later in the day, the deal with F9 emerged, meaning that about half of the flooring retailer’s 400-some stores will remain open under new ownership.

Under the deal, F9 Investments, part of the Cabinets to Go parent company F9 Group, will acquire 219 stores, LL Flooring’s intellectual property, and inventory sitting in the 219 stores and at the company’s Sandston distribution center, which was sold to a limited liability corporation connected to QTS Data Centers earlier this week for $104.75 million.

In its August bankruptcy filing, LL Flooring said it planned to close 94 stores, but that number rose to 211 in subsequent court filings. The 219 stores to be purchased by F9 “are open and continuing to serve customers with few changes to store operations and policies.” According to a court document filed by F9 attorneys this week, its purchase proposal “provides a certain recovery for stakeholders, and ensures continued employment for approximately 750 to 1,000 of the debtors’ employees.”

In June 2023, Tennessee-based F9 attempted to purchase LL Flooring, formerly Lumber Liquidators, but the company’s board rejected the offer, sparking a proxy war.

Although financial details were not provided in the sale announcement, in a document filed Sept. 3 in Delaware Bankruptcy Court, attorneys representing F9 said that it had offered LL Flooring $44.5 million in cash at closing and at least $22 million in assumed liabilities in a $66.5 million bid this summer. In a second document filed this week in the LL Flooring bankruptcy case, F9 said it had paid a deposit of $4.1 million toward the total purchase.

According to LL Flooring’s announcement, the acquisition is set to close by the end of September, pending approval by the federal bankruptcy judge.

LL Flooring filed for bankruptcy in August and announced it was pursuing a sale of its business, and that it had separately received a nonbinding letter of intent to sell its eastern Henrico distribution center. That sale was approved by the court, and an entity connected to QTS Data Centers has agreed to buy the 995,792-square-foot distribution center on 97.55 acres in the White Oak Technology Park for $104.75 million. QTS owns much of the technology park property, as well as all 622 acres of White Oak Technology Park II.

LL Flooring’s sales fell in fiscal 2023 to $904.7 million, down from $1.11 billion in fiscal 2022, when it opened 17 stores.

In May 2023, Sullivan purchased 9.4% of LL Flooring stock in preparation for a bid to merge LL Flooring’s stores with Cabinets to Go. According to a court document filed by F9 this week, LL Flooring owes about $7 million to F9, which owns many of the LL Flooring store locations and leases them to the company. On July 10, Sullivan, F9 Brands President and CEO Jason Delves and Jill Witter, a Texas-based legal consultant for F9 Investments, were elected to LL Flooring’s board, in an attempt to “hold the board accountable for the company’s abysmal stock price performance on an absolute and relative basis, an ineffective operational strategy, tremendous waste of capital and flawed strategic review process, among many other failures,” according to a May 31 announcement by F9, which owned 8.85% of LL Flooring’s common stock at the time.

Sullivan founded Lumber Liquidators in 1994 and left in 2016. In 2019, the company paid $33 million to settle allegations of securities fraud to the U.S. Department of Justice for “filing a materially false and misleading statement to investors regarding the sale of its laminate flooring from China to its customers in the United States,” according to a Department of Justice statement. The total fine included a $6 million payment to the U.S. Securities and Exchange Commission in a separate settlement. The settlement goes back to activities that took place in 2014 and 2015.

According to the DOJ, the CBS news program “60 Minutes” conducted an investigation starting in 2014 to test laminate products sold by Lumber Liquidators, which were shown to violate California Air Resources Board regulations and failed tests for maximum formaldehyde emissions, even after California authorities notified the company of the issue in 2013 and 2014. In a March 2015 episode of “60 Minutes,” Lumber Liquidators issued a “false and misleading statement to investors” that denied the allegations and affirmed that the company had complied with CARB regulations, the DOJ statement concluded.

Sullivan and other executives left the company in the months after the airing of the CBS report, and in 2020, Charles E. Tyson became the company’s president and CEO, after which Lumber Liquidators renamed itself LL Flooring in 2022.

In July, news broke that LL Flooring was considering filing for Chapter 11 bankruptcy, and shareholders elected the three F9 nominees to the company’s board. However, in the August SEC filing, LL Flooring revealed that the three F9 board members resigned shortly after the decision to enter Chapter 11 proceedings. According to F9’s court document, “these three persons did not engage in and recused themselves from discussions of the LL board” on F9’s bid to purchase LL Flooring’s assets.

Virginia 500: The 2024-25 Power List

Who are Virginia’s most powerful and influential leaders in business, government, politics and education this year? Find out in the fifth annual edition of the Virginia 500: The 2024-25 Power List.

Read more about how we assembled the Virginia 500 from our editor. 

Executives are listed in alphabetical order by industry.

Below you will find links to each of the 21 categories featuring the state’s top leaders this year: