Elliott Management Corp, the activist hedge fund that sits on Arconic Inc’s board, is working to address potential liabilities weighing on the sale process for the U.S. aluminum products maker, according to people familiar with the matter...

The potential legal liabilities stem from Arconic’s building and construction systems division, which makes facades, windows and framing products. Its Reynobond PE panels were used in the cladding of the London’s Grenfell Tower apartment complex, where more than 70 people were killed last year in a blaze...

Elliott has proposed a structure that would place liabilities of Arconic’s cladding business in a separate entity, the sources said. The technique, called ringfencing, has been used by other industrial conglomerates seeking to limit exposure to similar legal claims, the sources added...

The sources asked not to be identified because the matter is confidential... Elliott and Apollo declined to comment.