US lawyers set sights on Grenfell Tower cladding manufacturer
US litigation firms look into shareholder claims as New York-based cladding manufacturer halts sales of product
June 27, 2017 at 07:31 PM
4 minute read
A number of US law firms are looking into shareholder claims relating to the Grenfell Tower disaster, as the New York-based manufacturer of the building's controversial cladding announced it is halting sales of the product.
US securities litigation firms including Pomerantz, Goldberg Law and Bronstein Gewirtz & Grossman have all announced they are investigating potential shareholder claims in the wake of the west London fire, which killed at least 79 people.
Arconic – the manufacturer of the exterior panelling being blamed for the fire's ferocity – said this Monday (26 June) that it had "taken the decision to no longer provide this product in any high-rise applications, regardless of local codes and regulations".
Bronstein's press release cited a New York Times report noting that Arconic's UK marketing resources for the panels contained a less thorough safety warning than that which was offered in other countries. After the story was published, the company's stock dropped by more than 11%, the firm said.
Houston plaintiffs lawyer Mark Lanier said in an email that he suspects Arconic and its lawyers made avoidable missteps. (Lanier is not currently pursuing any claims related to the fire.)
"First, the company should have tested the panels in fire situations… Failure to test properly leads to a failure to warn properly," he wrote. "Second, the legal department (GC, etc) should have restricted sales until outside safety company approval. In other words, I would have sent the panels to some company outside Arconic to have that company determine whether or not there is a problem. That way some other company has involvement," he added.
"Third, the GC should have made incredible informative warnings, and included the limitations on testing," Lanier wrote. The lawyer who serves as Arconic's chief legal officer has changed in the past year.
Divisions of Alcoa split off to form Arconic in early 2016. As a newly formed company, Arconic initially tapped Audrey Strauss, who had been Alcoa's top lawyer, to serve as its chief legal officer. Strauss joined Alcoa in 2012 from Fried Frank Harris Shriver & Jacobson, where she led a white-collar criminal defence practice and was a prominent litigation partner. Before that, Strauss was a federal prosecutor in the Southern District of New York.
Alcoa's former CEO Klaus Kleinfeld also joined Arconic.
In 2016, Kleinfeld's total annual compensation was $16.8m and Strauss's was $3.6m, according to Arconic's proxy statement.
When Strauss announced her retirement in August 2016, Arconic named Kate Hargrove Ramundo as executive vice-president and chief legal officer. Ramundo had previously served as general counsel for New York-based ANN and deputy general counsel for Colgate-Palmolive.
Neither Strauss nor Ramundo responded to requests for comment made to the company.
For its part, Arconic has said it will no longer sell the same type of cladding for use in high-rise construction.
"While the official inquiry is continuing and all the facts concerning the causes of the fire are not yet known, we want to make sure that certain information is clear," the company said in a statement. "Arconic supplied one of our products… to our customer, a fabricator, which used the product as one component of the overall cladding system on Grenfell Tower.
"The fabricator supplied its portion of the cladding system to the facade installer, who delivered it to the general contractor. The other parts of the cladding system, including the insulation, were supplied by other parties. We were not involved in the installation of the system, nor did we have a role in any other aspect of the building's refurbishment or original design."
The company also noted that regulations in the US, Europe and the UK "permit the use of aluminum composite material in various architectural applications, including in high-rise buildings depending on the cladding system and overall building design".
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