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Defendants acquitted in Swissair trial
2007-06-07
All 19 managers and consultants accused in the collapse of former national carrier Swissair were acquitted Thursday and will receive compensation totaling more than 3 million Swiss francs ($2.5 million), the leading judge said. 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 have blamed the big Swiss banks and the Sept. 11 attacks for the airline's downfall. Union representatives and the courtroom audience expressed anger over the outcome. Prosecutors had requested 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 20,000 Swiss francs to 488,681 francs (about $16,000 to $400,000) for Corti, Judge Andreas Fischer said. Prosecutors have 10 days to appeal the acquittal. The proud Swiss flag carrier was abruptly grounded on Oct. 2, 2001, after months of financial problems led to its being 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, and the country's four main political parties demanded that former executives be held responsible. "The prosecution was an absolute fiasco," said Daniel Vischer, a lawyer and union leader. "Criminal law is a very tight corset," he told Swiss TV, referring to the difficulty of applying Swiss criminal law to such corporate cases. He suggested the prosecution might have been under political pressure. Urs Eicher, speaking on behalf of a flight attendants union, said he was especially concerned about the high compensation, which taxpayers would ultimately have to pay. "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. "I have expected the verdict and I'm satisfied," said Lorenz Erni, lawyer of former CEO, Philippe Bruggisser, who oversaw the airline's disastrous expansion strategy until he was forced out in January 2001. Bruggisser, Corti and three other defendants were absent from the reading of the verdict. Eric Honegger, a former CEO of the parent SAirGroup, said he was relieved with the verdict. Pressure and prejudgment have grown enormously since 2001, he said. The Swissair trial will stay with me until the end of my life," he told reporters outside the court room. The verdict came three months after the hearings were held in a makeshift room of a Zurich district court in order to accommodate the large number of defendants, journalists and spectators. During the three-week hearings, most of the defendants refused to testify for fear it could jeopardize parallel civil proceedings brought by former employees and shareholders seeking hundreds of millions of francs (dollars) in compensation. Honegger and Thomas Schmidheiny, a billionaire and a former SAirGroup board member, claimed in the hearings that the Belgian government put pressure on the company to conclude a misguided investment 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" which consisted of acquiring stakes in smaller airlines and related businesses to boost the company as a competitor for larger rivals. Others included Italy's Volare, France's Air Littoral and AOM, Germany's LTU, Poland's LOT and Portugal's TAP. A number of the former executives have also blamed the global slump in the travel industry after the Sept. 11 attacks for the airline's collapse.
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