Geneva and Neuchâtel take SAirGroup to court
Cantons Geneva and Neuchâtel have filed a lawsuit against the management of the now defunct SAirGroup, demanding answers as to why Swissair collapsed under a mountain of debt last year.
The two French-speaking cantons registered their case at the Public Prosecutor’s Office in Zurich on February 14.
The case alleges, among other things, that SAirGroup board executives misled investors, grossly mismanaged the business and gave preferential treatment to certain creditors.
Heavy losses
Canton Geneva lost SFr57 million ($33.6 million), when Swissair nose-dived because its 223,865 shares were rendered worthless. Neuchâtel’s losses were slimmer at around SFr1 million, but it did leave a SFr700,000 hole in the canton’s pension scheme.
The overriding reason behind the lawsuit is not to recoup lost funds but to understand what went wrong and who is responsible for Swissair’s collapse. Both cantons are calling for a public enquiry.
SAirGroup renamed Swissair Group
Last year, the SAirGroup was renamed the Swissair Group by the CEO of the national airline, Mario Corti, soon after he took over from Philippe Bruggisser, who left the company under a cloud in January 2001.
The SAirGroup board have been widely criticised for their management of Swissair and its related services.
During Swissair’s collapse, many analysts said that poor management and a misplaced plan to develop a global alliance, with Swissair at the centre, led to the downfall of the airline.
The situation was however worsened by the drop in passenger confidence following the September 11 terrorist attacks on New York and Washington. By the beginning of October Swissair was no longer able to fly under its own steam.
The government, banks and cantons stepped in with a multi-billion franc rescue plan, which involved the regional carrier Crossair absorbing Swissair’s most profitable routes.
The new national airline, a hybrid of Crossair and Swissair, has been re-branded as “swiss”. It is scheduled to take off with the introduction of the new summer timetable on March 31.
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