NEW YORK (TheStreet) -- Shares of Lumber Liquidators (LL) are down by 2.85% to $27.26 at the start of trading on Tuesday morning, following reports suggesting the hardwood floor retailer's insurance carriers are refusing to defend the company in class action suits brought on by angry customers, the New York Post said, adding that as a result Lumber Liquidators has filed a suit of its own against its insurers.
Lumber Liquidators has been fighting against accusations made in a report from CBS' "60 Minutes" claiming the laminated flooring the company makes out of China contains dangerous levels of the carcinogenic chemical formaldehyde.
Following the report Lumber Liquidators stood behind the safety of its products, however, last week the company said it will no longer sell the flooring.
The company could end up spending tens of millions of dollars if forced to defend and payout on claims made against it by consumers, the Post noted.
"This is a contract dispute ... over how some of the terms should be construed or defined. The insurers made a promise to defend Lumber Liquidators and they are now attempting to break that promise," the company said in a statement to the Post.
TheStreet's Jim Cramer, Portfolio Manager of the Action Alerts PLUS Charitable Trust Portfolio says, "I don't think people should speculate on this one as it is just too darned uncertain."
Separately, TheStreet Ratings team rates LUMBER LIQUIDATORS HLDGS INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation: