Boeing’s current and former directors have reached an agreement with shareholders in a lawsuit concerning board oversight of the 737 MAX aircraft, the Wall Street Journal reported on November 4, 2021.
The settlement is for approximately $225 million, the WSJ reported, citing sources familiar with the matter. The money will be paid by the directors’ insurers, the article stated.
Boeing has also agreed to appoint a board member with experience in aviation safety and hire an ombudsman to handle internal issues, the WSJ further reported. It said the settlement would be filed in a Delaware court on November 5, 2021.
The two 737 MAX crashes in 2018 and 2019 killed 346 people and led to the plane being grounded for 20 months.
A judge in Delaware ruled on September 7, 2021 that investors could sue Boeing, saying the board had failed to monitor the safety and airworthiness of Boeing aircraft.
Shareholders had argued that Boeing directors and officers failed in their oversight of airplane safety and thus in protecting the company’s value.
The crashes were caused by a software system called MCAS, which was designed to pitch the nose down under certain circumstances. However, the system was based on a sensor lacking redundancy and was not detailed in manuals provided to airlines and pilots.
A former Boeing test pilot was indicted in October 2021 for misleading the Federal Aviation Administration (FAA) during the certification process of the MAX. The Department of Justice said Mark Forkner had “intentionally withheld” crucial information about MCAS from the FAA and from Boeing’s airline customers.
AeroTime has reached out to Boeing for comment.