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U.S. Court Rules Boeing Board To Face Investor Lawsuit Over 737 MAX Crashes

boeing737 aug2 08sep21 lt

A US judge has ruled that Boeing's shareholders may pursue some claims against its board of directors over two fatal 737 MAX crashes, mainly on safety issues.

As per Vice Chancellor Morgan Zurn, Boeing's board must face a lawsuit from shareholders related to the crashes that killed 346 people in less than six months.

The Boeing 737 MAX, which was the world's biggest-selling aircraft, was grounded worldwide for 20 months in March 2019 following the two accidents, which together claimed 346 lives. The root cause of the accidents was then traced to software known as MCAS (Maneuvering Characteristics Augmentation System), intended to make the plane easier to handle.

Zurn's latest ruling in the Court of Chancery stated that the first 737 MAX crash was a red flag about the key safety system MCAS that the board should have heeded but instead ignored.

Zurn said, "The stockholders may pursue the Company's oversight claim against the board." Meanwhile, the Delaware judge dismissed two other claims.

Boeing is reportedly planning to review the opinion closely over the coming days as it considers next steps.

Following the 20-month safety ban, the Federal Aviation Administration in November last year allowed 737 Max aircraft to return to service, and also issued first airworthiness certificate for one of the new Boeing 737 Max jets. In January this year, the European Union and Britain cleared Boeing's 737 Max for return to service in their respective regions.

The crashes reportedly have cost Boeing around $20 billion.

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