US judge clears lawsuit against coating company Grenfell Tower

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U.S. shareholders in Grenfell Tower coating company Arconic may take legal action against the company, a court said, after witnesses said managers knew the coating malfunctioned during fire safety tests , but was used on tall buildings anyway.

A group of US investors said they suffered financial losses when Arconic’s Reynobond PE coating was involved in the Grenfell fire in 2017, which killed 72 people.

Their claim, which Arconic said was “unfounded,” depends on whether the company knew the coating could be dangerous and should have warned investors of the risk of its sale.

A U.S. judge ruled the lawsuit could be pursued after shareholders presented testimony from two former anonymous Arconic employees, who say executives at its French subsidiary were aware of the risks.

The complainants also cite an expert report, investigated by Grenfell Tower in the United Kingdom, which found that the safety rating of the coating had been lowered.

A confidential witness said that Claude Wehrle and Claude Schmidt, senior staff at the French outpost where Arconic’s coating was made, were aware of the coating’s poor performance during safety tests.

A second witness said Schmidt “knew that decommissioned Reynobond PE panels were routinely sold for use in high-rise buildings”.

Wehrle declined to testify at the Grenfell Inquiry. Schmidt told the investigation that while the fire test data was not withheld from building certifiers, its omission may have been a “misleading half-truth.” He also said he was “pretty sure” he raised his concerns with the US parent company.

During the legal battle with shareholders, Arconic said he could not know what the two men would have known, arguing that they worked in a foreign subsidiary and did not hold managerial positions in the company. .

The court refused to dismiss the shareholders’ request on these grounds.

According to the Western Pennsylvania District Court ruling, Arconic also argued that the men did not know the use of Reynobond PE was inappropriate because it depended on the overall coating system, not just the aluminum panels. .

The court concluded that this argument had failed, finding that the claim “supports a strong inference that [an Arconic manager] not only knew that Arconic regularly sold Reynobond PE for use in high-rise buildings, but also knew, or at least unwisely ignored, that this “common practice” was “inappropriate.”

The plaintiffs are making a financial claim against Arconic for their losses, although the value of the claim remains to be determined.

Although the judge dismissed several of the claims, including those against individual senior executives at the company, he allowed two.


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The claims that will arise are under Sections 10 (b) and 11 of the US Securities Act, which cover misleading information provided to shareholders and the liability of companies to them.

An Arconic spokesperson said: “Arconic takes note of the June 23, Pennsylvania Western District Court’s opinion in the Howard v Arconic shareholders case, in which the court dismissed numerous claims in the lawsuit. shareholders.

“With regard to the remaining claims, we maintain that they are also without merit and intend to prevail in court. “

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