Boeing’s board of directors has to deal with a lawsuit from shareholders over two fatal accidents affecting its 737 Max plane, a U.S. judge has ruled.
Morgan Zurn believes that the first crash that happened acted as a “red flag” about an important flight safety plan “which the board should have paid attention to but instead ignored”.
‘Stakeholders Lost Billions Of Dollars’
She said the real victims were those who died and their families but investors as well who also “lost billions of dollars”.
Boeing said that the company would “look into the next steps”.
In her ruling the Delaware judge stated: “While it may seem unattractive and cruel in front of the [family] loss, corporate law recognizes another set of victims: Boeing as a business, and its shareholders.
“The shareholders have come to this court claiming that Boeing’s directors and executives have failed to regulate the aviation security which is critical to protecting businesses and stock prices.”
Plane Crashes
The fatal plane crashes in Indonesia and Ethiopia in 2018 and 2019 killed all 346 people aboard the aircraft, resulting in 737 Max being grounded worldwide.
The investigation later found an error in the automatic flight control system, known as MCAS
In January, Boeing paid $ 2.5bn to resolve all criminal cases and concealed details of MCAS changes to security officials, contributing to the accidents.
But it still faces public action from families of the victims and recent legal action from shareholders.
What Did Boeing Say?
On Tuesday, Vice Chancellor Zurn dismissed some of the stakeholder’ claims, including one over the decision to give former chief executive Dennis Muilenburg a $ 60m retirement package after his dismissal.
However, the judge said another claim about board member oversight could go ahead. Shares in the plane maker slumped following the accidents and are yet to fully recover.
A Boeing spokesman said: “We are disappointed with the court’s decision to allow the plaintiffs’ case to proceed.”