Boeing settles 737 MAX safety lawsuit

Current and former Boeing Co directors have reached a proposed $ 237.5 million (AU $ 321.6 million) settlement with shareholders to settle a lawsuit over safety oversight by the board of directors of the ‘737 MAX aircraft.

Following two 737 MAX crashes in the span of five months in 2018-19 that killed 346, Boeing’s best-selling aircraft was grounded for 20 months and returned to service after the company made significant improvements to software and training.

The proposed deal, which was filed in Delaware Chancellery Court Friday night and confirmed by Boeing, will require the election of an additional director with expertise in aviation / aerospace, engineering or monitoring product safety within one year.

New York State Comptroller Thomas P. DiNapoli and the Fire and Police Pension Association of Colorado, the main plaintiffs, said the settlement, if approved, will be the largest monetary recovery under ‘a lawsuit brought in Delaware courts over allegations that the directors failed to protect themselves against the risk of harm.

Boeing’s board of directors “failed in its fiduciary responsibility to oversee safety and protect the company, its shareholders and customers from unsafe business practices and admitted illegal conduct,” said DiNapoli.

“We hope, in the future, that the reforms agreed to in this agreement will help protect Boeing and the flying public from future tragedies and begin to restore the reputation of the company.”

The deal provides that Boeing’s board of directors will still be required to have at least three directors with security experience, according to the proposal, which must be approved by a judge to become final.

Under the deal, Boeing would amend its bylaws to require the separation of CEO and board chairman positions, create an ombudsman program for at least five years to provide Boeing employees performing certification work planes for the Federal Aviation Administration a means of increasing work-related concerns.

The regulation would also require Boeing to provide annual public reports on safety-related improvements implemented by the aircraft maker since the MAX aviation disasters.

The financial fine is to be paid by insurers to Boeing, according to the documents, less up to $ 29.7 million (AU $ 40.2 million) in legal fees and expenses for shareholder lawyers.

Current and former Boeing directors do not admit to wrongdoing and say they were acting in the best interests of Boeing and its shareholders, according to the settlement.

The Delaware court in September ruled that Boeing shareholders can sue the board of directors, saying the 737 MAX’s first crash was a “red flag” regarding a security system known as MCAS “that the board should have heeded but ignored instead. “

The crashes cost Boeing some $ 20 billion (A $ 27 billion). Boeing agreed to a deferred prosecution agreement with the US Department of Justice in January, including $ 2.5 billion (AU $ 3.4 billion) in fines and compensation resulting from 737 MAX crashes.

Boeing upheld the settlement and said that “Boeing has taken important steps to strengthen and strengthen our commitment to aviation safety” since the accidents.

The regulation, he added, “builds on these actions with additional oversight and governance reforms that will further advance the safety and quality of the work we do.”

Boeing’s board of directors includes the recent additions of retired Lt. Gen. Stayce Harris, who has more than 10,000 hours of experience as a pilot of Boeing aircraft; and David Joyce, who led GE Aviation from 2009 to 2020.

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