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Ex-Swissair Bosses May End Up In Court  
User currently offlineStandby87 From Switzerland, joined Jul 2001, 536 posts, RR: 3
Posted (9 years 7 months 1 week 6 days 12 hours ago) and read 2861 times:

I wrote 3 years ago that certain people should end up in court for their part in the Swissair bankruptcy.

The wheels of justice grind slowly in Switzerland, but they might get there in the end:

http://www.swissinfo.org/sen/swissinfo.html?siteSect=107&sid=5667509

....
He told creditors this week that he had filed lawsuits in mid-March against former CEO Philippe Bruggisser and former finance chief Georges Schorderet.

The liquidator is also suing ex-board members, among them Thomas Schmidheiny, Lukas Mühlemann, and Mario Corti, a former Nestlé executive who replaced Bruggisser when the extent of Swissair’s financial problems became known.

The former bosses and board could also face more serious charges – of falsifying documents and breach of trust – according to the Zurich cantonal prosecutor, who told a newspaper that he could bring criminal charges later this year.

The writs issued by Wüthrich concern an internal transaction in which Swissair’s bankrupt parent company, SAirGroup, handed over a firm called Roscor AG to another company within the group but received no compensation from the receiving firm, SAirLines.

Wüthrich says the managers and the board at the time approved the takeover and are therefore personally responsible for the loss incurred to SAirGroup, which he estimates at SFr280 million.

Wüthrich is also seeking money back from consultants and banks, which were paid just before Swissair went under. Claim avoidance actions have already been launched against consultants KPMG and Deutsche Bank.
...


I notice Corti is being sued as well - let's see what happens....

11 replies: All unread, jump to last
 
User currently offlineRJ100 From Switzerland, joined Nov 2000, 4121 posts, RR: 29
Reply 1, posted (9 years 7 months 1 week 6 days 12 hours ago) and read 2811 times:

Completely agree that those people should be made (partly) responsible for the desaster. On the other side, this scandal has unknown dimensions, with politics involved. Who knows how many fingers are dirty in this game!

Regards,
RJ100



none
User currently offlineHB-IWC From Indonesia, joined Sep 2000, 4512 posts, RR: 72
Reply 2, posted (9 years 7 months 1 week 6 days 11 hours ago) and read 2790 times:

Some of these people are also under scrutiny in Belgium, as part of ongoing proceedings investigating the bankruptcy of SABENA, and possible corruption in the order of 34 Airbus narrowbodies. Prosecutors have alleged that SABENA was forced into taking these Airbus planes from Swissair's former lease-arm FLIT at rates that exceeded marketprice.

One of the constructions under investigation is the AMP, or Airline Management Partnership, set up between Swissair and SABENA. This arrangement allowed for Swissair to take complete control of the former Belgian flag carrier. After the AMP became operational, not a single strategic decision was ever taken in Brussels, and the Board of Directors of SABENA was effectively degraded to a rubber stamp authority, which was only allowed to confirm decisions taken by AMP in Zurich.

SABENA was represented at AMP by then SABENA CEO Paul Reutlinger, also Swiss, who, together with Bruggisser and former SAir Group Chief Jeff Katz, called the shots at AMP, and allegedly forced the Airbus fleet renewal plans, and some many other strategic decision, through SABENA's throat. The costly Airbus fleet renewal was just one of the factors that eventually led to SABENA's downfall.

I wouldn't be surprised at all of Philippe Bruggisser and Paul Reutlinger will eventually be taken to the cleaner's and have their day in the Belgian courts as well.


User currently offlineRJ100 From Switzerland, joined Nov 2000, 4121 posts, RR: 29
Reply 3, posted (9 years 7 months 1 week 6 days 11 hours ago) and read 2778 times:

Maybe but I bet Reutlinger and Bruggisser dont go to Belgium on their own. And they are secure as they have the right to stay in Switzerland.

Regards,
RJ100



none
User currently offlineHB-IWC From Indonesia, joined Sep 2000, 4512 posts, RR: 72
Reply 4, posted (9 years 7 months 1 week 6 days 9 hours ago) and read 2733 times:

I bet they won't show their faces voluntarily in Belgium, but, as the Swiss judiciary authorities seems to be gearing up for similar actions, I guess they'll eventually have to face the music anyhow. I can't imagine Paul Reutlinger and Jeff Katz being left out, as the Airline Management Partnership has really been the source of a number of strategic decisions that carry a distinctly fishy smell.

Incidentally, when in June of 2000 things started to go off track in Belgium, the same Airline Management Partnership quickly replaced Paul Reutlinger at the helm of SABENA. The official reason was that he was called for more important duties at another of these failed Swissair investments, AOM of France, but many people believe that Reutlinger had no other option than to leave SABENA because signs of mismanagement started to come out in the open.

And guess what, when all was said and done, also AOM found itself stuck to some highly unfavorable Airbus leases (for widebodies this time), courtesy of Paul Reutlinger and the Airline Management Partnership.


User currently offlineGlidepath73 From Germany, joined Mar 2005, 1021 posts, RR: 44
Reply 5, posted (9 years 7 months 1 week 6 days 9 hours ago) and read 2721 times:

My goodness, what a mess!
Really bad stuff was going on there.
Amazing, how a top airline can fall, just caused by a few managers...
Let's hope justice will treat them as they deserve it.



Aviation! That rocks...
User currently offlineIrishjohn From Russia, joined Nov 2004, 111 posts, RR: 0
Reply 6, posted (9 years 7 months 1 week 6 days 6 hours ago) and read 2673 times:

It has long been known that the collapse of SWISSAIR was the direct result of the actions of one man, plus two or three associates. His blinding ambition and need to be considered great resulted in many flawed decisions. What does remain a mystery is how the Board of SWISSAIR , a Board made up of some of the best names in the Swiss corporate world, remained unconcerned and essentially approved all actions take.

The final days were dreadful...I was a SWISSAIR passenger out of Kyiv and remember the Ukraine manager turning up at the airport personally to try and explain what happened. He was shell shocked but thinking about 'his' passengers and not the fact that he and his family were stranded in Ukraine.

In relation to SABENA.........not sure it fair to say that SWISSAIR was the only reason for it's demise. It is hard to justify an airline that made profits only once in its total history and then assume only outside reasons for its failure.

The pending court cases are necessary if Switzerland is to understand what happened to it's beloved SWISSAIR and the perhaps take a more pragmatic view on aviation in Switzerland.

Safe sailing

John


User currently offlineHB-IWC From Indonesia, joined Sep 2000, 4512 posts, RR: 72
Reply 7, posted (9 years 7 months 1 week 6 days 4 hours ago) and read 2627 times:

Quoting Irishjohn (Reply 6):
In relation to SABENA.........not sure it fair to say that SWISSAIR was the only reason for it's demise. It is hard to justify an airline that made profits only once in its total history and then assume only outside reasons for its failure

You are quite right with your remark. However, I believe that the actions of Swissair and the Swiss-controled Airline Management Partnership have greatly aggravated Sabena's position, and there was no other option left than to let the company go bankrupt.

I am equally convinced that, if Swissair had never been involved in Sabena, the Belgian Government would have keept Sabena afloat. The only question is really whether the Swissair scenario was not a blessing is disguise for Belgium and its government. Note that SN Brussels is currently faring much better than the remnants of the once great airline Swissair was...

Nevertheless, I believe the role of Swissair and its megalomanic chief should be investigated to the bone, also for the many Sabena employees that have found themselves out of a job partly because of this man's actions.


User currently offlineIrishjohn From Russia, joined Nov 2004, 111 posts, RR: 0
Reply 8, posted (9 years 7 months 1 week 6 days ago) and read 2556 times:

HB-IWC

I agree but the Belgian Government was not in a position to assist SABENA further.......it was already under investigation by the EU for previous support. In the end SWISSAIR was unable to continue funding SABENA's daily losses - even if a portion of that funding was being returned via AMP!!! Furthermore said SABENA employees were among the best paid in aviation and we also among the most militant!! Even when it was obvious to all that SABENA was dying they continued to demand and strike.

AMP did have some unusual transaction but I think that when the dust settles on this saga it will be noted that almost no one else would provided additional leases to SABENA! AMP was a sound idea and made loads of sense except it was managed more as a dump for stupid, unhealthy decisions by SWISSAIR than a stand alone operating entity. Even SWISSAIR suffered as a result of AMP decisions.

Safe sailing

John


User currently offlineHB-IWC From Indonesia, joined Sep 2000, 4512 posts, RR: 72
Reply 9, posted (9 years 7 months 1 week 5 days 16 hours ago) and read 2502 times:

The AMP concept was revolutionary and made lots of sense. Unfortunately it was misused by a couple of powermad people, who happened to be at the helm of AMP at the time, to force less than sound decisions through the throat of participating airlines.

Other than that, the conceptual thinking of the Qualiflyer Group and the Airline Management Partnership was simply revolutionary and far ahead of its time. Some of the lines of thinking behind the cooperation are now being picked up again by AF-KLM.


User currently offlineBennett123 From United Kingdom, joined Aug 2004, 7739 posts, RR: 3
Reply 10, posted (9 years 7 months 1 week 5 days 13 hours ago) and read 2472 times:

IMO Sabena was already going down.

The reason why the Belgian wanted to get shot of it was that they had a choice, sell to Swissair, (there were no other takers) or close.


User currently offlineHB-IWC From Indonesia, joined Sep 2000, 4512 posts, RR: 72
Reply 11, posted (9 years 7 months 1 week 5 days 8 hours ago) and read 2417 times:

Sabena was never in great shape, but some of the actions of the Airline Management Partnership have dramatically worsened the position of the former Belgian flag carrier.

The most important example of this mismanagement was Sabena's decision, under heavy pressure of Swissair and AMP, to replace its B737 fleet with a combination of 26 A319, 5 A320 and 3 A321 narrowbodies. Sabena had previously stated that it was only looking into replacing the ageing B732s, yet under heavy pressure, it decided to also get rid of the B733s/B734s an B735s. Without Swissair's pressure, Sabena had likely replaced the 13 B732s with an equal amount of B736s.

But what's even worse than this, is that the Belgian airline was forced into leasing these Airbus narrowbodies through SAirGroup affiliate FLIT, and that Sabena was charged scandalous leasing rates that far exceed actual market rates at the time. It was just one of the ways in which Swissair has tried to recuperate its investment into Sabena.

The list of other incidents of negative interference is long and ranges from unfavorable scheduling arrangements for Sabena to gross mismanagement in overseas catering contracts. I sincerely hope that many of these misdeeds will be thoroughly investigated.


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