By Dhirendra Tripathi
Investing.com – Boeing stock (NYSE:BA) fell 1.1% Wednesday as a Delaware judge said the company’s board must face a lawsuit by shareholders over two fatal crashes of its 737 Max aircraft that led to the death of 346 people.
According to Judge Vice-Chancellor Morgan Zurn of Delaware’s Court of Chancery, the defendants had pursued the agenda of rapid production and profit maximization while ignoring their oversight authority.
Boeing said it was “disappointed in the court’s decision to allow the plaintiffs’ case to proceed past this preliminary stage. The company has previously said the lawsuits presented a misleading picture of its position on the accidents.
Zurn said the company had ignored the "red flags" about the safety of the aircraft and its anti-stall system, following the crash of Lion Air flight 610 in October 2018.
In that incident, all 189 people on board were killed when the plane crashed into the sea shortly after takeoff from Jakarta. A November 2018 report by The Wall Street Journal had found that a new flight-control system known as MCAS was suspected of playing a significant role in the crash.
Less than five months later, all 157 on board an Ethiopian Airlines flight died when it crashed minutes after taking off from Addis Ababa. The second incident led to an almost two-year global grounding of the 737 Max fleet. The manufacturer secured the U.S. regulators’ nod to fly the plane again in November last year.
In January, Boeing settled criminal charges brought by the U.S. Justice Department in connection with the two crashes. The settlement included $2.2 billion in compensation to the families of the deceased and a $243 million fine.
Tuesday, the company appointed Matt Welch as vice president of investor relations. He succeeds Maurita Sutedja who moved on following more than a decade of leadership within several finance roles at Boeing.