(CN) – A group of public New York City pension funds is suing aerospace company TransDigm Group for wrongfully omitting a proposal related to the Paris Climate Agreement from its 2019 annual general meeting of shareholders.
The six pension funds, representing past and present New York City employee shareholders, collectively own TransDigm stock valued at $22 million, according to the lawsuit filed in the Southern District of New York. The funds allege violations of the Securities Exchange Act by Ohio-based TransDigm, which designs and supplies aerospace components for commercial and military aircraft use in North America and Europe.
According to the complaint, on Sept. 19, 2018, the funds submitted a proposal to have TransDigm “adopt a policy with time-bound, quantitative, company-wide goals for managing [greenhouse gas] emissions, taking into account the objectives of the Paris Climate Agreement.” The Paris Climate Agreement has been adopted by 195 countries aiming to limit the increase in global average temperature by reducing greenhouse gas emissions.
Under the funds’ authorizationm TransDigm’s comptroller notified the company of their request to have the proposal included in the annual shareholders meeting. However, TransDigm wrote to the SEC’s Division of Corporation Finance on Nov. 9, 2018 of its intention to omit the proposal.
TransDigm took it a step further by asking the division to issue a “no-action letter”stating that the division would not recommend that the SEC take action against TransDigm for omitting the proposal. To date, the SEC has not responded to the no-action letter, the complaint says.
Shareholders claim TransDigm’s decision to leave the proposal out of its 2019 meeting will cause “injury” and will be “irreparable” to the funds. They seek to stop TransDigm from soliciting shareholder proxies for its 2019 meeting without informing them of the funds’ proposal and including the proposal in the meeting.
The funds, the lawsuit say, intend to submit the proposal again for next year’s meeting and will continue to do so until the proposal is adopted, adding that TransDigm’s industry peers such as Boeing and Lockheed Martin have already set GHG management goals.
The funds are represented by Zachary W. Carter of the Corporation Counsel of the City of New York