Lumber Liquidators 2014 Annual Report Download - page 31

Item 1B. Unresolved Staff Comments.
None.
Item 2. Properties.
As of February 23, 2015, we operated 354 stores located in 46 states and Canada, including two opened
since December 31, 2014. In addition to our nine stores in Ontario, Canada, the table below sets forth the
locations (alphabetically by state) of our 345 U.S. stores in operation as of February 23, 2015.
State Stores State Stores State Stores State Stores
Alabama 5 Iowa 3 Nevada 3 Rhode Island 1
Arizona 5 Kansas 3 New Hampshire 5 South Carolina 6
Arkansas 2 Kentucky 4 New Jersey 13 South Dakota 1
California 37 Louisiana 5 New Mexico 1 Tennessee 6
Colorado 7 Maine 3 New York 19 Texas 27
Connecticut 6 Maryland 9 North Carolina 11 Utah 2
Delaware 3 Massachusetts 10 North Dakota 1 Vermont 1
Florida 21 Michigan 10 Ohio 13 Virginia 12
Georgia 10 Minnesota 6 Oklahoma 3 Washington 7
Idaho 2 Mississippi 2 Oregon 4 West Virginia 3
Illinois 15 Missouri 5 Pennsylvania 19 Wisconsin 5
Indiana 7 Nebraska 2
We lease all of our stores and our corporate headquarters located in Toano, Virginia, which includes our
call center, corporate offices, and distribution and finishing facility. Our corporate headquarters has 307,784
square feet, of which approximately 32,000 square feet are office space, and is located on a 74-acre plot. We
own approximately 110 acres of land in Henrico County, Virginia where we constructed a million square foot
distribution center that became fully operational in January 2015. We currently lease 665,486 square feet near
the port in the Hampton Roads area in Virginia but those leases are scheduled to expire by March 31, 2015.
We lease a 504,016 square feet facility in Pomona, California, which, along with our new facility in Virginia,
serve as our primary distribution facilities.
As of February 23, 2015, 31 of our store locations are leased from related parties. See discussion of
properties leased from related parties in Note 4 to the consolidated financial statements included in Item 8 of
this report and within Certain Relationships and Related Transactions, and Director Independence in Item 13
of this report.
Item 3. Legal Proceedings.
Prusak Matter
On August 30, 2012, Jaroslaw Prusak, a purported customer (‘‘Prusak’’), filed a putative class action
lawsuit, which was subsequently amended, against us in the United States District Court for the Northern
District of Illinois (the ‘‘Prusak Lawsuit’’). Prusak alleged that we willfully violated the Fair and Accurate
Credit Transactions Act amendments to the Fair Credit Reporting Act in connection with electronically printed
credit card receipts provided to certain of its customers. In the operative complaint, Prusak, for himself and
the putative class, sought statutory and punitive damages, attorneys’ fees and costs, and other relief. Although
we believed we had valid defenses to the claims asserted, we agreed to a settlement of the claims in the
lawsuit for approximately $705,000, which was previously accrued. At December 31, 2014, we had a
remaining accrual of $468,000, which was subsequently paid in January 2015.
Government Investigation
On September 26, 2013, sealed search warrants were executed at our corporate offices in Toano and
Richmond, Virginia by the Department of Homeland Security’s Immigration and Customs Enforcement and
the U.S. Fish and Wildlife Service. The search warrants requested information, primarily documentation,
related to the importation of certain of our wood flooring products. Since then, we have been cooperating
with the federal authorities, including the Department of Justice (‘‘DOJ’’), in their investigation. In recent
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