Defendants Acquitted in Swissair Trial
Thursday, June 7, 2007; 7:38 AM
BUELACH, Switzerland -- All 19 executives and consultants charged in the collapse of Switzerland's former national carrier Swissair were acquitted Thursday and will receive compensation totaling more than 3 million Swiss francs ($2.5 million), a judge in the case said.
Swissair was abruptly grounded on Oct. 2, 2001, after months of financial problems left it unable to pay for fuel and landing fees. Tens of thousands of passengers were stranded worldwide. Thousands of employees and shareholders lost their life savings.
Swiss politicians demanded that former executives be held responsible.
The defendants in Switzerland's largest corporate trial denied charges that included damaging creditors, mismanagement, making false statements and forging documents. Some blamed the Sept. 11 attacks and the ensuing global industry slump for the airline's downfall and others the blamed big Swiss banks.
Unions and many people in the courtroom were angered by the outcome Thursday.
"The prosecution was an absolute fiasco," said Daniel Vischer, a lawyer and union leader.
Prosecutors wanted a six-month prison sentence for Mario Corti, the last chief executive of now-defunct Swissair, and a range of suspended sentences for 18 other airline executives, board members and consultants. In addition to the acquittal, most of the defendants will receive compensation payments ranging from $16,000 to $400,000, for Corti, Judge Andreas Fischer said.
Prosecutors have 10 days to appeal the acquittal.
Urs Eicher, speaking on behalf of a flight attendants union, said he was especially concerned about the compensation for executives, which will be funded by taxpayers.
"Those who suffered real damage, the small people who lost jobs or pension funds in the Swissair bankruptcy, will get nothing," he told Swiss TV.
Attorneys for those charged in the case lauded the decision.
"I have expected the verdict and I'm satisfied," said Lorenz Erni, an attorney for former CEO, Philippe Bruggisser, who oversaw the airline's disastrous expansion until he was forced out in January 2001.
Bruggisser, Corti and three other defendants were not in court when the verdict was read.
Eric Honegger, a former CEO of the parent SAirGroup, said he was relieved.
"The Swissair trial will stay with me until the end of my life," he told reporters outside the court room.
Most of the defendants did not testify because of ongoing civil suits brought by former employees and shareholders who seek hundreds of millions in compensation.
Honegger and Thomas Schmidheiny, a billionaire and a former SAirGroup board member, claimed in the hearings that the Belgian government had pressured the company to invest in Belgium's airline Sabena, which was on the verge of liquidation.
Sabena was one of a number of airlines SAirGroup invested in under its failed "hunter strategy" in which the carrier acquired smaller airlines and related businesses. Others included Italy's Volare, France's Air Littoral and AOM, Germany's LTU, Poland's LOT and Portugal's TAP.