Charlotte, NC — US Boeing shareholders have reached a $225 million out-of-court settlement with the aircraft manufacturer’s current and former directors in a 737 MAX aircraft safety negligence case, The Wall Street Journal reported Thursday.
Shareholders had accused Boeing board members and several executives as well as current CEO David Calhoun of failing to ensure that control and information instruments on the 737 MAX were functioning effectively.
According to The Wall Street Journal, the compensation will be paid out by insurers, not the board members and executives. Boeing has also agreed to hire a mediator to handle internal issues and appoint a board representative with aviation safety experience.
The agreement, expected to be filed by Delaware’s Court of Chancery by Friday, will not require Boeing to admit to negligence on behalf of persons sued in the case, the WSJ reported.
The 737 MAX was involved in two crashes — one operated by Lion Air in October 2018 and the other by Ethiopian Airlines in March 2019 — that killed a total of 346 people. Investigations revealed that both incidents were related to the crash prevention system (MCAS).
Lawyers for the shareholders and Boeing did not immediately respond to request for comment by AFP.
Based on internal documents, shareholders said that proper safety procedures were not implemented on the 737 MAX after the 2018 crash, despite media reports linking the incident to the MCAS.
Developed in 2011 and launched in 2017, the 737 MAX was banned from flying in March 2019, before being declared safe again in November 2020.
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