Read the official press release
For Immediate Release
November 5, 2021
The Fire & Police Pension Association of Colorado and New York State Comptroller Statements on Proposed Settlement of Boeing Lawsuit
Shareholder Derivative Lawsuit Sought Reforms and Damages After Board of Directors Failed to Protect Against Catastrophic Safety Risks
The Fire & Police Pension Association of Colorado (FPPA) and New York State Comptroller Thomas P. DiNapoli issued the following statements today regarding the proposed settlement of their derivative lawsuit against the directors of The Boeing Company. FPPA and State Comptroller DiNapoli, as trustee of the New York State Common Retirement Fund, were appointed co-lead plaintiffs in the lawsuit.
In a derivative lawsuit, shareholders sue a company’s board of directors on the company’s behalf alleging that the board breached its fiduciary duties in a manner that harmed the company. The pension funds’ lawsuit sought damages and corporate governance reforms, following two mass casualty 737 MAX crashes and the subsequent grounding of the aircraft. Under the proposed settlement, which requires court approval, Boeing must adopt enhanced safety and oversight protocols including, among other measures, implementing an ombudsman program that will provide a channel for Boeing employees to raise work-related concerns, and adding an additional director with aviation, engineering, or product-safety oversight experience. Boeing will also recover $237.5 million from the directors’ insurers. If approved, the settlement will be the largest monetary recovery in a suit filed in the Delaware Courts alleging that directors failed to protect against the risk of harm to the company, which is known as a “Caremark action.”
Kevin Lindahl, General Counsel on behalf of FPPA: “The 737 MAX crashes were catastrophic tragedies. As shareholders, we sued Boeing’s Board of Directors to ensure the safety of its aircraft and to hold the directors accountable for their failure to uphold their fiduciary duties. In addition to the monetary recovery obtained we are extremely proud of the mandatory safety reporting and increased focus on safety metrics that have been established as part of the settlement, including a robust ombudsperson oversight program. This renewed priority on safety will further drive Boeing to regain its reputation and maintain shareholder value.”
State Comptroller DiNapoli said: “We sued Boeing’s board because they failed in their fiduciary responsibility to monitor safety and protect the company, its shareholders and its customers from unsafe business practices and admitted illegal conduct. It is our hope, moving forward, that the reforms agreed to in this settlement will help safeguard Boeing and the flying public against future tragedy and begin to restore the company’s reputation. This settlement will send an important message that directors cannot shortchange public safety and other mission-critical risks.”
Court Filing
Full text of settlement proposal