LL Flooring: Lumber Liquidators Successor Closes 430 Stores After Sale Fails

LL Flooring Holdings, Inc. filed chapter 11 on August 11, 2024 in the U.S. Bankruptcy Court for the District of Delaware to fund a going-concern sale process while preparing for store closing sales if a buyer did not emerge. The specialty flooring retailer cited lower home improvement spending after the pandemic, vendor shipment stoppages, and a liquidity squeeze that followed borrowing base reductions and supplier pullbacks as drivers of the filing - First Day Declaration. The case moved quickly: the debtors sought DIP financing within days, sold a distribution center, and then confirmed a liquidating plan after pivoting from a sale process to a store-by-store liquidation - DIP Motion; Sandston DC Sale Order; Confirmation Order.

The filing marked the end of a long turnaround effort for the company formerly known as Lumber Liquidators. The retailer rebranded to LL Flooring in 2022 but continued to face reputational issues from the 2015 formaldehyde controversy and legal settlements tied to prior product claims Retail TouchPoints and Richmond BizSense. In the 2024 case, the estate sought to stabilize operations long enough to run a marketing process, while also preparing for a full liquidation if negotiations failed.

Debtor(s)	LL Flooring Holdings, Inc. and affiliated debtors - Voluntary Petition
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	24-11680
Judge	Hon. Brendan L. Shannon - Voluntary Petition
Petition Date	August 11, 2024 - Voluntary Petition
Estimated Assets	$500,000,001-$1 billion - Voluntary Petition
Estimated Liabilities	$100,000,001-$500 million - Voluntary Petition
Total Debt	About $416 million Richmond BizSense
Cash at Filing	About $8 million Richmond BizSense
Stores (pre-filing)	About 430 locations in 46 states - First Day Declaration
Employees (pre-filing)	About 1,970 Richmond BizSense
DIP Facility	Up to $130 million ABL DIP - DIP Motion
Confirmation Date	December 18, 2024 - Confirmation Order
Claims Agent	Stretto, Inc. claims agent site

Restructuring Overview

The restructuring began as a going-concern sale process backed by debtor-in-possession financing. The DIP Motion sought approval for up to $130 million in ABL financing with a $12 million letter of credit sublimit, pricing at Base Rate plus 2.25%, and a short maturity that ended at the earliest of October 18, 2024, a plan effective date, or asset sale events - DIP Motion. The motion also included a roll-up of $10.6 million in outstanding letters of credit and contemplated rolling remaining prepetition ABL obligations into the DIP at the final order stage - DIP Motion. Those terms were designed to keep the business operating while a sale process ran and to fund store closing sales if a buyer did not materialize.

The First Day Declaration described a prepetition marketing process focused on a going-concern sale, coupled with a parallel track to engage a liquidation agent if needed. That dual-track approach reflects the company's liquidity constraints and vendor pressures, which limited its ability to operate without immediate financing and a quick path to either a buyer or liquidation. Less than a month after filing, the company announced it would liquidate and close all stores after negotiations with multiple bidders failed, and a private equity buyer associated with founder Thomas Sullivan later acquired a subset of stores and assets Retail TouchPoints and Retail Dive.

A liquidating plan was confirmed in December 2024, establishing a liquidating trust and appointing a liquidating trustee to administer retained causes of action and distribute estate assets - Confirmation Order. The plan treated secured and priority claims as unimpaired, while general unsecured claims were impaired and entitled to pro rata distributions from trust assets, and subordinated claims and equity interests were deemed to reject - Confirmation Order. This framework marked the transition from an attempted going-concern sale to a structured liquidation and claims reconciliation process.

Company Background and Store Footprint

LL Flooring was founded in 1994 as Lumber Liquidators and built a national footprint as a specialty flooring retailer. The company rebranded to LL Flooring in January 2022 as part of an effort to reposition the brand after years of litigation and reputational challenges, but it continued to operate a large brick-and-mortar network Retail TouchPoints and Richmond BizSense. The First Day Declaration described the company as a specialty flooring retailer operating about 430 stores across 46 states, with three distribution centers in Sandston, Virginia; Pomona, California; and Dallas, Texas.

The business model centered on a focused product mix that included hardwood, laminate, vinyl, and bamboo flooring, sold through retail stores and supported by distribution centers that managed inventory and fulfillment - First Day Declaration. Headquarters were located at 4901 Bakers Mill Lane in Richmond, Virginia, with corporate functions and leadership based in the region - First Day Declaration. The scale of the store network meant that the company faced high fixed costs in the form of rent, labor, and supply chain logistics, which amplified the impact of declining demand and vendor disruptions.

A snapshot of the operating footprint at filing is below.

The breadth of the network made a rapid liquidation difficult but necessary once the sale process stalled.

The company's historical issues also shaped its restructuring narrative. Richmond BizSense reported that LL Flooring faced ongoing tariff costs on imported materials and scrutiny over sourcing from the Chinese Uyghur region, adding complexity to vendor relationships and inventory planning Richmond BizSense. Those supply chain pressures compounded the broader decline in home improvement spending and reduced the company's flexibility in negotiating with suppliers.

The rebrand from Lumber Liquidators to LL Flooring in 2022 was intended to reset the company's identity after years of controversy. FloorDaily noted that the company filed for bankruptcy in August 2024 and reported that founder Thomas Sullivan had resigned from the board, signaling governance changes during the restructuring period FloorDaily. Floor Covering News also covered the filing and framed it as the end of a multi-year turnaround effort in the specialty flooring segment Floor Covering News.

These background elements provide context for why vendor confidence was fragile and why the company struggled to secure a buyer. A business with a large store network but persistent reputational headwinds and supply chain constraints faced a narrow window to stabilize operations, which is consistent with the short DIP maturity and the rapid pivot to liquidation described in court filings - First Day Declaration; DIP Motion.

In a retail restructuring, a large store base can be a source of value if a buyer exists, but it also represents significant carrying costs. The chapter 11 process therefore attempted to run a sale while preserving enough liquidity to keep stores open and inventory flowing long enough to maximize recoveries.

Causes of Distress and Vendor Crisis

Court filings and news coverage point to a combination of demand pressures, vendor disruptions, and legacy reputational issues. The First Day Declaration stated that demand normalized after the pandemic-driven surge in home improvement spending, and the company faced a reduced sales environment as discretionary spending fell. At the same time, borrowing base reductions and liquidity stress led vendors to tighten terms or stop shipping, which the declaration described as a major driver of the filing.

Vendor disruption accelerated in the months leading to the petition date. Richmond BizSense reported that by July 2024 roughly half of vendors had stopped shipping or reduced inventory, and that by the filing date about 80% of annual volume was affected by halted shipments or unfavorable terms Richmond BizSense. For a retailer that depends on reliable inventory availability, those disruptions limited product selection, reduced store traffic, and weakened the company's ability to generate cash during a critical liquidity period.

The company also continued to face reputational overhang from the 2015 formaldehyde controversy involving Chinese laminate flooring. Retail TouchPoints and Richmond BizSense recounted the 2015 "60 Minutes" report and the subsequent legal settlements, including a $33 million settlement in 2019 and a $36 million settlement in 2017 tied to class-action claims Retail TouchPoints and Richmond BizSense. The company rebranded in 2022, but the legacy of those controversies likely continued to influence consumer perception and vendor confidence.

Financial results reflected the stress.

The balance sheet metrics reported in news coverage show how thin liquidity had become by the time the company pivoted to liquidation. Richmond BizSense reported total assets of about $501 million, total debt of about $416 million, and cash on hand of roughly $8 million, figures that underscore the limited liquidity available to fund store operations and vendor payments Richmond BizSense. The same report noted a $103 million annual loss in 2023 and a roughly $29 million net loss for the first quarter of 2024, indicating that the company was operating at a loss during a period of declining revenue Richmond BizSense.

The stock price collapse mirrored those financial pressures. Richmond BizSense reported shares trading around $0.02 with a market capitalization of roughly $462,000, a decline from the company's 2013 peak of $119 per share Richmond BizSense. Those equity metrics reflected the market's assessment that the company had limited prospects for a standalone turnaround, which likely influenced the shift from a sale process to liquidation.

Richmond BizSense reported that LL Flooring posted a $103 million loss in 2023 and a roughly $29 million loss in the first quarter of 2024, with quarterly revenue of $189 million down 21.7% year-over-year Richmond BizSense. These results indicate that the company was losing money even before the vendor crisis intensified, leaving little margin to absorb a sudden inventory disruption.

The combination of demand normalization, vendor pullbacks, and a constrained balance sheet created a liquidity spiral. As suppliers tightened terms, the company faced lower inventory availability and weaker sales, which further reduced cash flow. The First Day Declaration noted that the company pursued a marketing process for a going-concern sale and explored liquidation alternatives before filing, highlighting that management viewed chapter 11 as a mechanism to preserve value while deciding between a buyer and a liquidation.

DIP Financing and Liquidity Terms

The debtors sought debtor-in-possession financing immediately after filing to preserve liquidity and fund the sale process. The DIP Motion requested approval of a $130 million ABL facility with a $12 million letter of credit sublimit and a roll-up of $10.6 million in existing letters of credit. The DIP Motion stated that pricing included Base Rate plus 2.25% interest, a default rate equal to the interest rate plus 2.00%, a 2.25% letter of credit fee, a fronting fee of up to 0.125% per annum, and a 0.25% commitment fee on unused commitments.

The facility was designed to mature quickly. The DIP Motion stated that the DIP would mature on the earliest of October 18, 2024, the plan effective date, an asset sale, or other termination events, which effectively required a rapid resolution of the case and aligned with a fast-moving sale or liquidation timeline. The DIP Motion also imposed budget variance tests with 15% limits on receipts, disbursements, and excess availability. Noncompliance with those tests constituted an event of default, giving lenders leverage over the pace of the restructuring.

A summary of the DIP terms is below.

These terms underscore that the financing was intended to stabilize operations only briefly while the sale process played out.

The First Day Declaration also outlined the prepetition capital structure that the DIP would sit on top of. As of the petition date, the debtors reported approximately $109.6 million in funded debt, including about $99 million outstanding under a prepetition ABL facility and $10.6 million in letters of credit. The First Day Declaration stated that there were 31,776,089 shares of common stock outstanding as of August 6, 2024, highlighting a public equity structure that had largely lost market value by the time of the filing.

These figures help explain why the DIP financing emphasized roll-ups and tight budget controls. With a modest cash position and limited operating flexibility, the debtors relied on ABL-based liquidity and store closing proceeds, creating a restructuring environment in which lenders prioritized collateral protection and rapid milestones. The short maturity and variance tests therefore reflect both lender caution and the debtor's limited runway to complete a sale or liquidation.

The short maturity and strict budget controls signal that lenders expected a near-term resolution, either through a sale, liquidation, or plan confirmation, rather than a long-term operating reorganization. The DIP also granted senior secured liens and adequate protection to the prepetition ABL lenders, aligning the interests of secured creditors with the liquidation outcomes - DIP Motion.

Sale Process, Store Closures, and F9 Acquisition

LL Flooring entered chapter 11 with a dual-track plan to pursue a going-concern sale while preparing for liquidation. At filing, the company announced plans to close 94 stores as part of a restructuring strategy that preserved a reduced footprint and allowed time for a sale process CBS News and Retail TouchPoints. That initial closure plan reflected a belief that a buyer might emerge, allowing the company to reorganize around a smaller set of locations.

The sale process did not produce a going-concern buyer within the timeline the company needed. Retail TouchPoints reported that negotiations with multiple bidders over approximately one month failed, prompting the company to pivot to full liquidation Retail TouchPoints. Retail Dive reported that the liquidation decision was announced less than a month after the chapter 11 filing and that the company would close all stores after a buyer failed to materialize Retail Dive. Fox Business similarly reported that the company planned to close more than 400 stores and go out of business after about 30 years in operation Fox Business.

The liquidation was not total. Retail TouchPoints reported that F9 Investments, a private equity firm led by founder Thomas Sullivan, agreed to acquire 219 stores along with inventory, intellectual property, and distribution assets on September 9, 2024 Retail TouchPoints. The deal allowed those locations to continue operating under a restored Lumber Liquidators brand, with the rebrand occurring by October 2024 according to reporting on the transaction Retail TouchPoints. The remaining 211 stores proceeded through liquidation sales and closures, consistent with the full liquidation announcement.

CBS News published a list of the initial 94 store closures, underscoring how the company first attempted to preserve a reduced footprint rather than shutting down the entire chain CBS News. When the company later announced a full liquidation, the timeline for closures was short, with reports indicating that stores would close within a matter of weeks after liquidation sales began Retail Dive. The rapid closure schedule reflected the need to monetize inventory quickly and reduce cash burn, which is consistent with the short maturity and milestone structure in the DIP facility - DIP Motion.

Richmond BizSense reported that the liquidation process also resulted in significant layoffs, including about 300 positions at the Libbie Mill headquarters and 119 at the Sandston distribution center, with total job impacts approaching 2,000 across the retail footprint Richmond BizSense. That workforce reduction reflected the shift from an operating retailer to a liquidation scenario and the transfer of a subset of stores to a new owner rather than a full going-concern rescue.

The transaction with F9 Investments illustrates a common chapter 11 outcome in retail cases: a founder or strategic buyer acquires a subset of viable locations while the balance of the chain liquidates. By separating 219 stores from the broader liquidation, the deal preserved a portion of the brand and operating footprint while allowing the estate to monetize inventory and remaining assets for creditor distributions. The sale process and liquidation therefore combined a partial going-concern transfer with a broader wind-down of the remaining estate.

Plan of Liquidation and Trust Structure

The chapter 11 plan converted the case from a liquidation process into a formal trust-based distribution structure. The Confirmation Order approved the second amended plan of liquidation and established a liquidating trust in which estate assets vested on the effective date, with a liquidating trustee empowered to prosecute retained causes of action and distribute proceeds - Confirmation Order. The plan treated secured and priority claims as unimpaired, while general unsecured claims were impaired and entitled to pro rata distributions from trust assets. Subordinated claims and equity interests were impaired and deemed to reject the plan - Confirmation Order. Those terms are consistent with a liquidation plan in which recoveries depend on asset sales and litigation proceeds rather than ongoing operations.

The plan also approved debtor releases, third-party releases, exculpation, and injunction provisions, indicating that the restructuring included a negotiated release package as part of the wind-down - Confirmation Order. These release provisions are typical in retail liquidations where key stakeholders seek finality and the ability to transfer assets without lingering litigation risk.

Asset sales provided a key source of value for the plan. The Sandston DC Sale Order approved a sale of 97.55 acres and a roughly 995,792 square foot building to SNA NE, LLC for $104.75 million, with a $5 million deposit and a $350,000 work fee applied to purchaser costs - Sandston DC Sale Order. The order found the transaction to be the highest and best offer, approved the sale free and clear of liens and claims, and directed proceeds to the DIP and ABL obligations - Sandston DC Sale Order. That sale monetized a major real estate asset and provided liquidity to support the estate's wind-down.

The plan's structure can be summarized as follows.

With a liquidating trust in place, the case shifted from operational decisions to claims reconciliation, sale proceeds allocation, and the pursuit of any remaining litigation claims.

The Confirmation Order's liquidation trust structure centralizes estate administration after store closures and asset sales. A liquidating trustee is authorized to manage retained causes of action, including avoidance actions or other litigation claims preserved for the estate, and to make distributions as recoveries are realized - Confirmation Order. This approach is common in retail liquidations where proceeds from inventory sales, real estate dispositions, and litigation recoveries are collected over time rather than distributed immediately at confirmation.

The liquidation trust structure provides a mechanism to continue estate administration after the debtor's operating business has been sold or closed, and it centralizes decision-making under a trustee for creditor distributions.

The timeline highlights how quickly the case moved from a petition date to liquidation decisions. Within about one month, the company transitioned from a proposed store-reduction strategy to a full liquidation and then confirmed a plan in December 2024. Those dates underscore the compressed nature of the restructuring and the reliance on asset sales rather than a prolonged operating reorganization.

Key Timeline

Frequently Asked Questions

What is LL Flooring?

LL Flooring Holdings, Inc., formerly Lumber Liquidators, was a specialty flooring retailer founded in 1994 that operated about 430 stores across 46 states with three distribution centers and a headquarters in Richmond, Virginia - First Day Declaration.

Why did LL Flooring file for chapter 11?

The company cited declining home improvement demand after the pandemic, vendor shipment stoppages, borrowing base reductions, and liquidity pressure, along with reputational headwinds from prior litigation, as reasons for the filing - First Day Declaration.

How large was the vendor disruption before filing?

Richmond BizSense reported that by July 2024 roughly half of vendors had stopped shipping or reduced inventory, and by the filing date about 80% of annual volume was affected by stopped shipments or unfavorable terms Richmond BizSense.

What DIP financing did the debtors obtain?

The DIP Motion sought a $130 million ABL facility with a $12 million letter of credit sublimit, Base Rate plus 2.25% pricing, and a short maturity that could occur as early as October 18, 2024 - DIP Motion.

What happened to LL Flooring stores?

The company initially announced 94 store closures but later shifted to a full liquidation after a buyer did not emerge, with all stores slated to close CBS News and Retail Dive.

Who acquired part of the business?

F9 Investments, led by founder Thomas Sullivan, agreed to acquire 219 stores along with inventory and other assets, and those stores were expected to operate under a revived Lumber Liquidators brand Retail TouchPoints.

What happened to the Sandston distribution center?

The court approved a sale of the Sandston, Virginia distribution center to SNA NE, LLC for $104.75 million, with proceeds applied to DIP and ABL obligations - Sandston DC Sale Order.

What did the liquidating plan provide?

The confirmed plan created a liquidating trust, treated secured and priority claims as unimpaired, and provided pro rata distributions to general unsecured creditors from trust assets - Confirmation Order.

Who is the claims agent for LL Flooring?

Stretto, Inc. serves as the claims and noticing agent. The firm maintains the official claims register and distributes case notices to creditors and parties in interest claims agent site.

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