- A new shareholder lawsuit alleges that Boeing's board members were careless in their oversight of the Boeing 737 Max, leading to a "loss of credibility in the marketplace, a damaged reputation and billions in potential business costs and liability."
- The suit, first reported by Bloomberg, was filed in Delaware Chancery Court by the Kirby Family Partnership LP.
- The lawsuit appeared to be the first by shareholders targeting the company's board.
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A new shareholder lawsuit is accusing Boeing's board members of ignoring repeated red flags in the 737 Max's development.
The suit, filed by the Kirby Family Partnership LP — which says it has owned Boeing shares since 2018 — also accuses Boeing's board of directors of failing to properly investigate role of the plane's MCAS software in the October 2018 crash of Lion Air Flight 610 in Indonesia, according to a Bloomberg report. That was followed in March by a second crash, involving Ethiopian Airlines Flight 302, prompting a worldwide grounding of the 737 Max.
The lawsuit claims Boeing rushed to get the plane to market, consequently failing to test the plane or adequately train pilots.
Boeing announced the 737 Max program — a new generation of the 737 — in 2011 after initially considering designing a brand-new plane. Its rival Airbus announced a new A320neo in 2010, and American Airlines, formerly an exclusive customer, placed an order for the new Airbus jet. That reportedly put pressure on Boeing to design the 737 Max quickly to avoid losing more business.
In addition to the grounding of the worldwide 737 Max fleet — which has already led Boeing to take a nearly $5 billion charge — the lawsuit says the board's actions hurt Boeing "through loss of credibility in the marketplace, a damaged reputation and billions in potential business costs and liability."
Reports into the two crashes that led to the grounding indicate that the automated MCAS software erroneously engaged and forced the planes' noses downward. Pilots were unable to regain control of the aircraft.
Boeing has since been working on an update to the MCAS software, which regulators must approve before the 737 Max can be approved to fly again.