Kase Capital's Whitney Tilson said something seemed off when he first started his research on Lumber Liquidators (LL) a couple of years ago. Tilson said it didn't make any sense to him how margins, which were roughly six percent for 20 years, could double in a very short period of time. 'It just didn’t make any sense in a commodity industry competing against Home Depot and Lowe's, that your profit really could suddenly double.' Tilson believes the contingent liability of covering the cost to test floors already installed and covering the cost to replace floors alone could be enough to wipe out the wood flooring company. As for the issues around wood with elevated levels of formaldehyde, Tilson says Wall Street analysts were aware of the issue years ago, but to his knowledge never conducted independent tests and assumed the tainted wood issues had been resolved. TheStreet's Ruben Ramirez sat down with Tilson for an in-depth conversation at his home in New York City.