A Zurich court has rejected a case brought by the liquidators of former airline Swissair demanding that 14 ex-directors in the company be held responsible for some CHF280 million ($292 million).
The grounding and bankruptcy of the former Swiss national airline dates back to 2001, but the fallout continues: on Friday, the commercial court of canton Zurich ruled on the latest liquidation row, involving 14 ex-CEOs and financial officers.
Those administrating the liquidation of the company had brought claims of an “exceptional extent”, the court said, with the combined arguments of plaintiffs and defendants coming to some 18,000 pages.
Concretely, the liquidators argued that the 14 had acted disloyally in abandoning the debts associated with a loan that the airline had made to its parent company SAirGroup in the lead-up to the bankruptcy.
When Swissair collapsed in October 2001, the loans could not be repaid, and this was the fault of the 14 defendants’ actions, the accusation claimed.
However, the court decided based on a lack of passive legal standing – some of the 14 had even left Swissair before the collapse took place – and on the non-existence of any breach of duty that the defendants should not be held accountable for the CHF280 million.
The money would have disappeared regardless of any action the defendants could have taken, the court said: according to official company policy, any available credit was always to have been used to finance flight operations rather than being diverted to more solvent locations.
The decision can still be appealed to the Federal Supreme Court.