Dive Brief:

• Lumber Liquidators has sued nine of its insurance carriers for denying to cover it for lawsuits filed against the flooring retailer by customers.

• In the spiraling crisis that has resulted from revelations that Lumber Liquidators may have sold Chinese-made laminate flooring containing unhealthy levels of formaldehyde, the national chain admitted in court papers that the scandal could be its undoing, according to CNBC.

• A combination of tanking stock prices, loss of sales and lawsuits that are piling up “could negatively affect our operations, financial condition and liquidity and impair our ability to grow or sustain our business," documents filed in a state court in Wisconsin said.

Dive Insight:

The company’s investors are abandoning it, builders are distancing themselves from the brand, and last week, under pressure, Lumber Liquidators announced it would discontinue the sale of the suspect laminate flooring. In addition, the retailer is the subject of Justice Department investigation.