Boeing Board Of Directors Will Pay $237.5 Million To Settle Shareholder Dispute
According to a report from the Seattle Times, a group of current and former directors at Boeing have preliminarily agreed to pay $237.5 million to settle a shareholder dispute. The proposed shareholder agreement, which was filed in the Delaware Chancery Court last week, is related to the board’s alleged oversight regarding safety issues related to the 737 MAX aircraft. In this article, our Miami shareholder dispute lawyer discusses the settlement reached between Boeing and its shareholders.
Background: Two Deadly Plane Crashes, Grounding of All Aircrafts
The Boeing 737 Max is a relatively new model of aircraft that took its first flight in early 2016. In the spring of 2017, it was certified for commercial service in the United States by the Federal Aviation Administration (FAA). Tragically, two horrific 737 Max plane crashes would soon ground the fleet.
In October of 2018, Lion Air Flight 610 departed from Soekarno–Hatta International Airport in Jakarta, Indonesia. The 737 Max crashed killing 189 people. Six months later, Ethiopian Airlines Flight 302 taking off from Addis Ababa crashed killing 157 people. Investigations into the aviation incidents revealed that defects on the 737 Max contributed to the deadly crashes.
Allegations: Top Leadership at Boeing Was Aware of the Safety issues
In January of 2021, the United States Department of Justice (DOJ) announced that the Boeing corporation agreed to pay a $2.5 billion fine to settle fraud and conspiracy charges involving the 737 Max. The DOJ determined that high-ranking employees at Boeing, including executives, were aware of safety defects related to the 737 Max aircraft. Yet, they made misleading statements and material omissions to federal safety regulators and to members of the general public.
Boeing Shareholders Were Damaged By the Corporation’s Misconduct
The failure of Boeing’s Board of Directors to take proper safety precautions caused tangible damage to shareholders. A corporation’s officers and directors owe a fiduciary duty to shareholders. Among other things, this fiduciary duty requires corporate executives to monitor safety practices and to protect both customers and shareholders from illegal conduct.
Notably, the Delaware Chancery Court has previously ruled that Boeing shareholders had a right to pursue a legal claim against the company. In making an initial ruling in favor of shareholders, the court emphasized that the first 737 Max crash in Indonesia should have raised serious “red flags” for Boeing’s corporate leadership. Yet, it appears that they failed to take any additional action to protect public safety, passenger safety, or shareholder interests.
Schedule a Confidential Case Evaluation With a Shareholder Rights Lawyer in South Florida
At Pike & Lustig, LLP, we provide results-driven legal representation in shareholder disputes. If you have any questions or concerns about your rights as a shareholder, our attorneys are more than ready to get started on your case. Contact us now for a strictly confidential review and evaluation of your claim. We provide shareholder rights legal services all over Southeast Florida, including in Miami, Miami Beach, Hialeah, Fort Lauderdale, Boca Raton, and West Palm Beach.