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Shareholders can file lawsuit against Grenfell cladding firm: US judge

Shareholders can file lawsuit against Grenfell cladding firm: US judge
Shareholders can file lawsuit against Grenfell cladding firm: US judge

A US court has reportedly ruled that shareholders in Arconic, the Grenfell Tower cladding firm, can pursue a lawsuit against the firm after witnesses testified that the managers were aware that the cladding failed fire safety testing, yet it was still being utilized on high-rise buildings.

According to reports, a group of investors from the US claims that they suffered financial damages when the company’s cladding, dubbed ‘Reynobond PE’ was implicated in the 2017 Grenfell Tower disaster, which killed 72 people.

Their claim, which was dismissed as ‘meritless’ by Arconic, relied on whether the firm was aware that the cladding may be hazardous and should have told investors about the dangers of selling it.

A US judge ruled that the shareholders can proceed with their lawsuit after the court was presented testimonies from two former Arconic workers, who claimed that management at the company's French division was aware of the risks.

Over the testimony presented by the stakeholders, Arconic has argued that it could not have known what the two individuals supposedly knew, claiming that they worked for a foreign subsidiary and did not have significant positions inside the firm.

However, the court declined to ignore the shareholders' claim, on this basis.

As per the ruling, which was given in the district court for Western Pennsylvania, Arconic has also claimed that the men were unaware that the use of Reynobond PE was improper since it was dependent on the whole cladding system, and not solely on the aluminum panels.

Sections 10(b) and 11 of the US Securities Act, which address false information supplied to shareholders and firms' liability for them, will be pursued for the claims that will go further.

A spokesperson from Arconic stated that the Arconic acknowledges the Pennsylvania Western district court ruling dated June 23 in the Howard v Arconic shareholders lawsuit, in which the court rejected several of the allegations in the shareholders' lawsuit.

Source credit: https://www.theguardian.com/uk-news/2021/jul/18/us-judge-allows-lawsuit-against-grenfell-tower-cladding-firm

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Sunil Jha

Sunil Jha has been a part of the content industry for close to two years. Having previously worked as a voice over artist and sportswriter, he now focuses on writing articles for newsorigins.com, across a slew of topics, ranging from technology to trade and finance. With a business-oriented educational background, Sunil brings forth the expertise of deep-dive research and a strategic approach in his write ups.