Arconic sued in United States over fatal London tower fire
A shareholder of Arconic Inc
In his proposed class-action complaint, Michael Brave is seeking to recoup "significant" shareholder losses stemming from Arconic`s failure prior to the June 14 blaze to properly disclose its use of "highly flammable" Reynobond PE panels.
The shareholder lawsuit filed in the federal court in Manhattan, where Arconic is based, may be the first in the United States tied to the fire that gutted the 24-story Grenfell Tower, in London`s North Kensington section.
Arconic`s share price fell 21 percent between June 14 and June 27, the day after the company once known as Alcoa said it would stop selling the panels for use in high-rises.
That decline reduced Arconic`s market value by more than $2.5 billion, according to Reuters data.
Arconic did not immediately respond to requests for comment. Brave also named former Chief Executive Klaus Kleinfeld and current Chief Financial Officer Kenneth Giacobbe as defendants.
The complaint seeks to allow Arconic shareholders from Feb. 28 to June 26 to sue as a group.
Brave said shareholders were deceived by Arconic`s inadequate disclosures regarding the cladding panels, and that their use significantly increased the risk of property damage, injury or death in buildings containing them.
He said Arconic`s public statements were "materially false and misleading at all relevant times," and that Kleinfeld and Giacobbe should also be held liable for their contents.
It is common for shareholders to sue companies in the United States over unexpected stock price declines that they believe could have been averted.
Shares of Arconic closed Thursday up 26 cents at $24.45. They had closed at $21.84 on June 27.
The case is Brave v Arconic Inc et al, U.S. District Court, Southern District of New York, No. 17-05312.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.