Boeing reaches tentative deal with pension fund plaintiffs over 737 MAX

Boeing Co., Chicago, and co-lead plaintiffs New York state Comptroller Thomas P. DiNapoli and the Colorado Fire & Police Pension Association have come to an agreement on a proposed $237.5 million settlement regarding a shareholder lawsuit related to the design of Boeing's 737 MAX airplane.

The lawsuit, led by the trustee of the $268.3 billion New York State Common Retirement Fund, Albany, and the $6.6 billion Greenwood Village, Colo.-based pension fund, had been filed in Delaware Chancery Court in Wilmington in June 20 and alleged Boeing and its board of directors breached their fiduciary duties by dismantling Boeing's "lauded safety-engineering corporate culture in favor of what became a financial-engineering corporate culture," leading to what the plaintiffs call the flawed design of Boeing's 737 Max airplane.

Under the proposed settlement, which will require court approval, Boeing would recover $237.5 million from the directors' insurers and also adopt new enhanced safety and oversight protocols, the co-lead plaintiffs said in a joint news release Nov. 5.

Those protocols include "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," the news release said.

Boeing, in the court's stipulation and agreement of compromise, settlement and release, "have denied and continue to deny each and every one of the claims alleged by the co-lead plaintiffs in the action" but "have taken into account the expense, uncertainty and risks inherent in any litigation" and "have determined that is desirable and beneficial that the action, and all of the parties' disputes related thereto, be fully and finally settled."

Mr. DiNapoli said in the co-lead plaintiffs' news release: "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."

Boeing's stock closed at $224.46 on Nov. 5, up 5.4% for the day.

Boeing spokesman Michael D. Friedman could not be immediately reached for comment.