Prosecution not to appeal in Swissair case

Swissair relics take off at the Swiss Transport Museum in Lucerne Keystone Archive

Swiss public prosecutors have decided not to appeal against a lower court decision that cleared all 19 former Swissair managers of criminal malpractice.

The public prosecutor’s office in Bülach, near Zurich, said on Friday that after studying the written verdict it would not pursue the case any further as the chances of success were insufficient.

On June 7, 2007 a Bülach district court acquitted all 19 defendants accused of charges of mismanagement and criminal negligence contributing to the airline’s collapse and awarded them around SFr3 million ($2.5 million) in compensation.

The presiding judge declared there was no evidence the defendants knowingly acted to damage the company.

Federal prosecutor Christian Weber said on Friday that from a legal perspective the court’s motivations were defensible and when a doubt exists, it should benefit the defendants.

The verdict highlighted that courts show restraint in judging complex penal business cases, he added. This is particularly true when it is not possible to criticise or prove that the defendants demonstrated unjustified intent to gain enrichment.

Ongoing claims

At present, an appeal lodged by the Neuchâtel cantonal authorities against the court verdict remains pending. The canton held some 2,700 shares in the SAirGroup, Swissair’s parent company, and its pension scheme ended up with debts resulting from the airline’s downfall.

In August this year, Karl Wüthrich, the lawyer appointed to oversee the liquidation of the SAirGroup’s assets, said that creditors of the bankrupt airline would probably start to receive payments for the first time in November, six years after its spectacular collapse.

Wüthrich said in a circular to creditors that he was planning to begin interim payments out of a total SFr9.82 billion in recognised claims. A large proportion of the claims – SFr5.25 billion – are still subject to litigation in a Zurich district court, the circular added.

They include SFr3.88 billion relating to the company’s operations in Belgium, where Swissair had taken over the former flag carrier Sabena, and challenges over aircraft leasing contracts.

First- and second-class claims – notably by staff employed by the airline and its parent group when it went under – account for nearly SFr19 million. They are likely to receive the total amount they are claiming.

Creditors in SAirGroup had lodged total claims of $48.9 billion, according to Wüthrich’s debt restructuring data.

swissinfo with agencies

In brief

Swissair planes were grounded in October 2001, after the company had been in business for 71 years.

The downturn in the aviation market after the terrorist attacks of September 11, 2001, proved the last straw for the heavily indebted Swissair, which folded the following year.

The airline collapsed because it over-extended itself by buying stakes in numerous loss-making airlines, including Belgium’s Sabena and Poland’s Lot, in an attempt to form its own airline alliance.

The remains of Swissair and the regional carrier Crossair were brought together in 2002 to form the new national carrier Swiss, which was in turn taken over by Germany’s Lufthansa in 2005.

In June 2007 all 19 former Swissair managers accused of criminal malpractice were cleared by a Zurich district court.

The defendants in Switzerland’s largest corporate trial had all denied charges that included damaging creditors, mismanagement, making false business statements and forging documents.

Some blamed the Belgian government, the big Swiss banks and the September 11 terrorist attacks for the airline’s downfall.