https://www.msn.com/en-us/money/companies/boeing-board-let-ceo-mislead-on-737-max-crash-causes-suit-says/ar-BB1dxhbw
February 9, 2021
Directors, including current Chief Executive Officer David L. Calhoun,
lied about the company’s oversight of its 737 Max 8 airliner
and participated in a misleading public-relations campaign following
two fatal crashes involving the plane, shareholders claim.
The board ignored red flags about the 737 Max, didn’t develop its own
tools to evaluate safety and didn’t properly hold former chief executive
officer Dennis Muilenburg accountable for launching a lobbying and
public-relations effort to push back against criticism of the plane’s
design flaws, according to recently unsealed court filings.
“Prior to the grounding of the 737 Max, the board failed to undertake
its own evaluation of the safety of keeping the 737 Max aloft,”
investors said in an amended Delaware Chancery Court complaint that
was made public Feb. 5.
The board then “compounded its lack of oversight by publicly lying about it.”
The unsealed filings, first reported by the Wall Street Journal, are part of a derivative suit first filed in 2019 by Boeing shareholders after Lion Air and
Ethiopian Air crashes, the Max murders claimed a total of 346 lives.
Unlike in shareholder class actions, judgments or settlements in derivative
suits are usually paid back to the company from liability insurance policies for its directors and officers.
‘Public Interest’
The amended complaint makes public for the first time details about
Boeing’s internal handling of the 737 Max debacle, which led to a two-year grounding of the planes.
Delaware Chancery Court Judge Morgan Zurn agreed to make the
suit’s details public after concluding the “public interest” in the board’s
handling of the 737 Max fiasco “favors disclosure.”