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

LL Flooring Holdings, Inc. — the specialty retailer formerly known as Lumber Liquidators — wound down nearly its entire 430-store footprint through a chapter 11 liquidation, confirming a liquidating plan roughly four months after filing and vesting its remaining assets in a liquidating trust. Eighteen months past the effective date, the trust has paid administrative and priority claimants but made no distribution to general unsecured creditors, and the claims docket remains active into late 2026.

The company filed chapter 11 on August 11, 2024 in the U.S. Bankruptcy Court for the District of Delaware, lead case 24-11680, before Judge Brendan L. Shannon. The First Day Declaration of chief restructuring officer Holly Etlin attributes the filing to post-pandemic demand normalization, borrowing-base reductions under the asset-based lending facility, and vendor shipment stoppages that drained liquidity. The case opened as a dual-track effort to sell the business as a going concern while preparing for store-closing sales, then pivoted to full liquidation when bidders failed to clear, before F9 Investments acquired a portion of the chain on the eve of the wind-down.

Debtor(s)	LL Flooring Holdings, Inc. (and affiliated debtors)
Court	U.S. Bankruptcy Court, District of Delaware
Case Number	24-11680
Judge	Hon. Brendan L. Shannon
Petition Date	August 11, 2024
DIP Facility	Up to $130 million ABL DIP (Bank of America-led)
Confirmation Date	December 18, 2024
Effective Date	December 20, 2024
Liquidating Trustee	Steven Balasiano
Claims Agent	Stretto, Inc.

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Vendor Shipment Stoppages and Formaldehyde Litigation

LL Flooring was founded in 1994 as Lumber Liquidators and built a national footprint as a specialty flooring retailer selling hardwood, laminate, vinyl, and tile to homeowners and DIY customers. The First Day Declaration describes a company operating about 430 stores across 46 states from three distribution centers in Sandston, Virginia; Pomona, California; and Dallas, Texas. The company rebranded to LL Flooring in 2021 after years of formaldehyde litigation and adverse media coverage tied to the Lumber Liquidators name, and it had been exploring strategic alternatives since at least August 2023.

Holly Etlin's declaration attributes the filing to a convergence of pressures: lower home-improvement spending as pandemic-era demand normalized, borrowing-base reductions under the prepetition ABL facility, and vendor shipment stoppages that followed disclosures of financial distress. By July 2024, roughly half of LL Flooring's vendors had stopped shipping or reduced inventory, and by the petition date stopped shipments or less favorable terms affected about 80% of annual volume. Tariff costs on imported materials and scrutiny over sourcing from the Chinese Uyghur region added strain to vendor relationships and inventory planning.

The brand's legal legacy compounded the operating decline. A 2015 "60 Minutes" report on formaldehyde levels in Chinese-made laminate flooring preceded a $36 million class-action settlement in 2017 and a $33 million formaldehyde-related settlement in 2019. Founder Thomas Sullivan, who had departed the board years earlier, later returned as the buyer of the surviving stores.

The financial trajectory left little runway. Richmond BizSense reported a $103 million net loss in 2023 and a roughly $29 million net loss in the first quarter of 2024 on revenue of about $189 million, with shares trading near $0.02 and a market capitalization of roughly $462,000, down from a 2013 peak of $119 per share.

Capital Structure and the $130 Million ABL DIP

LL Flooring carried a relatively simple capital structure built around a revolving asset-based facility rather than funded notes or bonds. The First Day Declaration reported about $109.6 million in total funded debt as of the petition date, comprising roughly $99 million outstanding under the prepetition ABL facility and $10.6 million in letters of credit, with Bank of America leading the lender group. The declaration stated that 31,776,089 shares of common stock were outstanding as of August 6, 2024.

The debtors moved for debtor-in-possession financing the day after filing to preserve liquidity and fund the sale and wind-down. The DIP Motion sought approval of an up-to-$130 million ABL facility with a $12 million letter of credit sublimit, priced at Base Rate plus 2.25% with a default rate of 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 rolled up $10.6 million of existing letters of credit, with the remaining prepetition ABL obligations rolling into the DIP on entry of the final order.

The financing came with tight controls. The DIP Motion set maturity at the earliest of October 18, 2024, the plan effective date, the closing of an asset sale, or other termination events, imposed 15% variance tests on receipts, disbursements, and excess availability, and required entry of a final DIP order within 35 days of the petition and revolver repayment by October 18, 2024. The lenders received senior secured superpriority DIP liens and adequate protection, subject to a professional-fee carve-out for debtor and committee professionals. The court entered the Interim DIP Order on August 14, 2024 and the Final DIP Order on September 4, 2024.

Term	Description
Facility size	Up to $130 million ABL DIP
L/C sublimit	$12 million
Roll-up	$10.6 million letters of credit; remaining prepetition ABL on final order
Pricing	Base Rate + 2.25%; default rate +2.00%
Fees	2.25% L/C fee; 0.25% commitment fee; up to 0.125% fronting fee
Maturity	Earliest of 10/18/2024, plan effective date, asset sale, or termination
Budget tests	15% variance on receipts, disbursements, and excess availability
Milestones	Final DIP order within 35 days; revolver repaid by 10/18/2024

Failed Sale Process and the F9 Going-Concern Bid

Prepetition marketing and the sale motion. The debtors had run a marketing process spanning more than a year before filing, soliciting both going-concern acquisition bids and inventory-liquidation bids, and that effort produced no actionable transaction before the petition date. On the second day of the case, the debtors filed a bidding procedures motion reserving the right to designate a stalking horse, while the DIP facility imposed a milestone requiring execution of a stalking-horse agreement by August 26, 2024, later extended to August 29. In parallel, the debtors moved to assume a store-closing agency agreement with Hilco Merchant Resources, LLC, which had begun closing sales at 94 underperforming stores around August 9, 2024.

Two bidders, then the liquidation pivot. Two prospective going-concern buyers emerged — Isaac Capital Group and F9 Investments, LLC. Isaac Capital could not secure committed financing, and the parties never aligned on deposit, closing timing, or price; F9's early proposals came in far below the liquidators' inventory bids, with a gap of at least $30 million and no value ascribed to fixtures or intellectual property. When the extended stalking-horse deadline passed without an actionable bid, the debtors filed a Notice of Liquidation Pivot on August 30, 2024, announcing they would close all remaining stores through Hilco. The declaration of Holly Etlin supporting the pivot recounted the failed negotiations, even as the company and a buyer remained in talks to avoid a full chapter 11 liquidation as the deadline lapsed.

F9's revised going-concern bid. Immediately after the pivot notice, F9 returned with a stronger going-concern proposal. LL Flooring signed an agreement with F9 Investments on a going-concern sale, executing an asset purchase agreement on September 6, 2024 with purchaser LumLiQ2, LLC and guarantor F9 Investments. The notice of the proposed sale order and APA described a transaction covering intellectual property, certain furniture, fixtures and equipment, and inventory at roughly 219 acquired stores, for a purchase price of $1,000,000 plus an inventory price and assumed cure costs; inventory at the Dallas and Pomona distribution centers was excluded and liquidated separately.

The Stealth Holdings objection. Stealth Holdings, LLC submitted a competing asset purchase agreement shortly after F9's was executed and objected to the sale, arguing its bid was higher or better. The debtors determined that Stealth's bid was only marginally higher, that switching buyers would invite significant litigation, and that the F9 agreement was a fully negotiated arm's-length deal. After a full-day contested hearing, the court overruled the objection and entered the Sale Order on September 16, 2024, approving the F9 transaction. The approval allowed part of the business to avoid liquidation, and the sale closed on September 30, 2024, with the acquired stores set to operate again under the Lumber Liquidators name. The going-concern sale and the Sandston real estate sale together preserved roughly 800 jobs.

Sandston distribution center sale. The same Sale Order approved the sale of the Sandston, Virginia distribution center — 97.55 acres and a roughly 995,792-square-foot building — to SNA NE, LLC for $104,750,000, with a $5,000,000 deposit and a $350,000 work fee applied to purchaser costs. The U.S. Trustee objected to a break-up fee for the buyer, and the court approved that fee after a contested hearing on September 4, 2024. The court found the transaction the highest and best offer, approved it free and clear with successor-liability protections, and directed proceeds to the DIP and ABL obligations. Following both sales, the debtors pursued comprehensive lease rejection and abandonment motions as the remaining stores wound down, and closures proceeded within weeks of liquidation sales beginning. The company issued layoff notices for about 300 positions at the Libbie Mill headquarters and 119 at the Sandston distribution center.

Liquidating Plan and GUC Trust Formation

LL Flooring confirmed its second amended plan of liquidation when Judge Shannon entered the Confirmation Order on December 18, 2024, with the plan going effective on December 20, 2024 — roughly four months after the petition. The plan established a liquidating trust in which estate assets vested on the effective date, with Steven Balasiano appointed liquidating trustee to prosecute retained causes of action, make distributions, and act as the sole officer and director of each post-effective-date debtor.

The Disclosure Statement and plan set out the class treatment. Secured claims (Class 1) and other priority claims (Class 2) were unimpaired and slated for payment in full. General unsecured claims (Class 3) were impaired and entitled to a pro rata recovery from the liquidating trust, with the recovery percentage left open at confirmation. Subordinated claims (Class 4) and equity interests (Class 5) were deemed to reject and received nothing, with those interests cancelled. The Confirmation Order also approved debtor releases, third-party releases, exculpation, and injunction provisions.

Class	Description	Impairment	Treatment
Class 1	Secured Claims	Unimpaired	Paid in full (cash, collateral, or reinstatement)
Class 2	Other Priority Claims	Unimpaired	Paid in full
Class 3	General Unsecured Claims	Impaired (voting)	Pro rata recovery from Liquidating Trust
Class 4	Subordinated Claims	Impaired (deemed reject)	Cancelled; no distribution
Class 5	Equity Interests	Impaired (deemed reject)	Cancelled; no distribution

Professional Retentions and the Genesis Credit Partners Fee Disputes

The debtors retained Skadden, Arps, Slate, Meagher & Flom LLP as lead counsel, Young Conaway Stargatt & Taylor, LLP as co-counsel, Houlihan Lokey Capital, Inc. as investment banker, and AP Services, LLC, which supplied chief restructuring officer Holly Etlin. The official committee of unsecured creditors retained Cole Schotz P.C. as counsel along with two co-financial advisors, Foresight Restructuring LLC and Genesis Credit Partners LLC. The Omnibus Fee Order entered February 24, 2025 awarded final fees across the estate professionals, with Skadden approved for about $6.07 million — roughly 46% of the more than $13.1 million in total approved professional fees.

Houlihan Lokey's compensation tracked the M&A character of the case. Its first and final fee application was approved at $3,002,832.42, with a $2,750,000 sale transaction fee accounting for most of the total and $250,000 in monthly advisory fees across August and September 2024. The Skadden final fee application details the contested matters the firm handled, including objections to the bidding procedures from the U.S. Trustee, the creditors' committee, the DIP lenders, and landlords, all resolved before entry of the bidding procedures order.

Genesis Credit Partners drew a two-layer challenge unusual for a committee financial advisor. The U.S. Trustee objected to the firm's fee application on overstaffing, technology expense, and billed-hours grounds, and the dispute was resolved through an amended fee order entered January 8, 2026 approving $1,023,942.13. Separately, the liquidating trustee filed his own informal objection to Genesis's combined fourth-monthly and final application — which sought $1,313,120 in fees plus $10,464.39 in expenses — and negotiated a Rule 9019 settlement under which Genesis paid $180,000 to the trust, forfeited a $119,642.26 holdback, and waived post-effective-date amounts, for roughly $299,642 in total value. The court approved that settlement on December 31, 2025.

Post-Effective Date Distributions and Claims Reconciliation

Distributions have moved slowly down the priority waterfall. Through the quarter ending December 31, 2025 — one full year after the effective date — the liquidating trustee reported zero distributions to every creditor class. By the Q1 2026 post-confirmation report covering the quarter ending March 31, 2026, cumulative distributions since the effective date reached $826,731 to administrative claimants, $127,650 to priority claimants, and $175 to secured claimants, while general unsecured creditors had still received nothing. Total cash disbursements since the effective date reached about $16.68 million, and the trustee listed a placeholder final-decree date of December 31, 2027.

Claims reconciliation has driven much of the second-year docket. After early omnibus objections, the trustee filed a third wave on April 30, 2026, and the court sustained them on June 9, 2026; the order sustaining the fifth omnibus objection disallowed 23 no-liability claims totaling roughly $1.94 million and reclassified eight others. No-liability grounds included the debtor's non-liability under the F9 asset purchase agreement and taxes for locations closed or sold before the relevant period. In his third motion to extend the claims objection deadline, the trustee reported roughly 3,970 claims asserting more than $488.2 million under review, and the court entered an order extending the deadline to December 14, 2026.

One contested matter remained live in mid-2026. Meta Platforms, Inc. sought allowance of a $332,987.59 administrative expense claim for advertising services, asserting section 503(b)(1)(A) priority under a post-petition trade agreement entered pursuant to the critical-vendor order. The liquidating trustee objected on March 27, 2026, arguing the charges were for pre-petition advertising that conferred no estate benefit and that Meta had already been paid in full for post-petition services. Meta countered that post-petition contracts are enforceable by their terms regardless of estate benefit. The parties had stipulated to reserve the full amount in a segregated account, and the dispute remained unresolved as of June 2026.

Key Timeline

Date	Event
1994	Lumber Liquidators founded
2015	"60 Minutes" report on formaldehyde in Chinese laminate flooring
2017	$36 million class-action settlement over product claims
2019	$33 million formaldehyde settlement
2021	Rebranded from Lumber Liquidators to LL Flooring
~Aug 9, 2024	Hilco begins store-closing sales at 94 stores
Aug 11, 2024	Chapter 11 petitions filed; 94 store closures announced
Aug 12, 2024	DIP financing motion filed
Aug 14, 2024	Interim DIP Order entered
Aug 30, 2024	Notice of Liquidation Pivot filed
Sep 4, 2024	Final DIP Order entered; Sandston break-up fee approved
Sep 6, 2024	F9/LumLiQ2 asset purchase agreement executed
Sep 16, 2024	Sale Order entered (F9 and Sandston DC) after contested hearing
Sep 30, 2024	F9 going-concern sale closes
Dec 18, 2024	Confirmation Order entered
Dec 20, 2024	Plan effective date; liquidating trust established
Feb 24, 2025	Omnibus final fee order entered
Dec 31, 2025	Genesis Credit Partners Rule 9019 settlement approved
Jun 5, 2026	Claims objection deadline extended to December 14, 2026
Jun 9, 2026	Fifth omnibus claims objection sustained

Frequently Asked Questions

Why did LL Flooring file for chapter 11?

The First Day Declaration attributes the filing to lower home-improvement spending after the pandemic, borrowing-base reductions under the ABL facility, and vendor shipment stoppages that drained liquidity, layered on top of brand damage from earlier formaldehyde litigation.

How large was the vendor disruption before filing?

By July 2024, roughly half of vendors had stopped shipping or reduced inventory, and by the petition date stopped shipments or unfavorable terms affected about 80% of annual volume.

What DIP financing did the debtors obtain?

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

Who bought LL Flooring's stores?

F9 Investments, led by founder Thomas Sullivan through purchaser LumLiQ2, LLC, acquired intellectual property, certain fixtures, and inventory at about 219 stores for $1 million plus an inventory price and cure costs, and those stores reopened under the Lumber Liquidators name after the sale closed on September 30, 2024.

What happened to the Sandston distribution center?

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

Have unsecured creditors been paid?

No. As of the Q1 2026 post-confirmation report, the liquidating trust had distributed $826,731 to administrative, $127,650 to priority, and $175 to secured claimants, but nothing to general unsecured creditors, with claims reconciliation ongoing and the objection deadline extended to December 14, 2026.

Who is the claims agent for LL Flooring?

Stretto, Inc. serves as the claims and noticing agent and maintains the official claims register for the case.

For related coverage of large retail liquidations and trust wind-downs, see Big Lots' shift to chapter 7, the 99 Cents Only Stores 371-store liquidation, Conn's store closings and 363 sale, and Ascena Retail Group's GUC trust wind-down.