Boeing Directors Facing Lawsuit from Investor Over Two Fatal Crashes
The Boeing 737 Max Has Been Given Clearance to Fly Again in The Previous Year After Being Grounded March In 2019
A United States Judge has ruled that the board of directors of aircraft manufacturing firm Boeing must face a lawsuit from the firm’s shareholding members over two crashes that had involved the same type of aircraft, their 737 Max airliners. It has been stated by Morgan Zurn that the initial plane crash involving 737 Max had provided the required red flag regarding the key safety aircraft system that should have been heeded by the board members of Boeing but was instead ignored.
She said that the real victims of the fatal accident were the dead that was onboard, along with their relatives and family members, but the Boeing investors have also suffered a major loss as they had a decrease in profits by billions of dollars. The aircraft manufacturing company stated that they are currently considering their next steps.
Cause of plane crashes
The Delaware judge gave remarks in her ruling that while it might seem callous in the face of the losses suffered by the victim’s families, it is recognized by the corporate law another set of victims that had suffered from these crashes; Boeing as a full enterprise, along with its shareholding members.
The investing parties have come forward in the court and claimed that the directors, along with the officers at Boeing, have failed to provide them the required results and in overseeing the safety of the aircraft, which is a critical step in the protection of the enterprise along with the value of its stockholders.
In the year 2018 and 2019, there were plane crashes involving the Boeing 737 Max in Indonesia and Ethiopia, respectively, in which all of the 346 passengers and crew members on board had died, which led to the grounding of 737 Max all across the world.
It was later found during investigation that a flaw in the automated flight control system of the aircraft, which is also known as MCAS, was the fault of these fatal incidents.
In the month of January, Boeing had paid the amount of $2.5 billion in settlement for criminal charges that had been made on them for concealment of information regarding the changes made in the MCAS from the concerned safety officials, which had played a major contribution in the crashes.
But the firm is still facing various civil lawsuits from relatives and family members, along with the latest addition of legal action that has been taken by the shareholders.
Lawsuit by investors on Boeing
On Tuesday, Vice-Chancellor Morgan Zurn was able to dismiss some of the claims that have been stated by the investors, including one of them that was regarding a decision to award Dennis Muilenburg, the former chief executive officer of Boeing, with a retirement package worth $60 million after he had been fired.
However, it had been said by the judge that another claim regarding the oversight of board members of Boeing could go ahead. The shares of Boeing have observed a slump following the occurrence of such fatal accidents in the previous years, and the firm is yet to fully recover from that.
A spokesperson from Boeing said that they are disappointed by the decision made by the US court to allow the case of the plaintiff to advance past its primary stage of the trial. They are reviewing the opinions closely over the upcoming few days as the firm considers taking the next steps.
The Boeing 737 Max has been given clearance to fly in the United States in the month of November in the previous year, while this year the aviation had cleared the usage of 737 Max in Canada and Europe after the entire automated flight security system had been upgraded to prevent occurring of any unforeseen fatal incident, while the aircraft is still grounded to be used by airlines across China.
The two crashes that had occurred a few years back due to faulty system of Boeing 737 Max during flights, resulting in the loss of around 400 innocent lives and millions of dollars’ worth of equipment, which has cost Boeing around $20 billion in the form of fines additionally, due to cancellation of orders by multiple airlines around the world, along with some other costs.