Liquidator attacks Swissair defendants

Wüthrich said the defendants failed to devise a convincing strategy to restructure the company Keystone

Swissair's liquidator, Karl Wüthrich, has accused the 19 defendants in Switzerland's largest corporate trial of being entirely to blame for the airline's collapse.

Wüthrich told a Zurich court on Tuesday that the defendants had failed to take the necessary steps to ensure that the airline’s parent company, the SAirGroup, was properly restructured.

“The Swissair management, rather than the September 11 attacks, were responsible for the airline’s demise,” he said.

The 19 defendants in the Swissair trial have all pleaded innocent to charges that include damaging creditors, mismanagement, making false business statements and forging documents.

On Monday the federal prosecutor announced the eagerly anticipated sentence requests. These included a six-month prison sentence for Mario Corti, Swissair’s last chief executive, and a range of suspended sentences and fines for the 18 other airline executives, board members and consultants.

“Despite the urgent need to restructure the company in spring 2001, the accused never came up with a convincing strategy,” said Wüthrich. “And they assumed the state and the economy would bail them out.”

The liquidator also blamed former CEO Philippe Bruggisser and the executive board for shifting healthy parts of the group into the badly stricken SAirLines, which was “inadmissible”.

In court Bruggisser had defended this strategy and had described it as simply moving something from one pocket to another.

“But the SAirLines pocket had a hole in it,” said Wüthrich.

Fair-weather captain

While the liquidator said he supported the sentence requests, Michael Werder, president of the committee of SAirGroup creditors, called in court for a tougher sentence for Bruggisser, who came up with the widely blamed “hunter” strategy, which involved buying stakes in other airlines as part of an expansion policy.

At the same time Werder asked that Corti be shown greater leniency, comparing him to “a fair-weather captain who had fallen asleep on the bridge of his ship during a storm”.

The court also heard on Tuesday from Stefan Rutgers, the lawyer for the former Belgian national carrier Sabena that had been controlled by Swissair, who described Sabena as a victim of Swissair management.

“Sabena’s collapse was the end point for a company that had been exploited and abandoned,” argued Rutgers, claiming that the SAirGroup management had knowingly transferred Sabena’s resources to Switzerland causing the Belgian airline’s downfall.

“Over time Sabena changed into an airline responsible for transporting passengers to Swissair’s intercontinental platform,” he said.

Rutgers also announced that Sabena’s liquidator was due to start legal action against the defendants, which would add to ongoing civil indictments in both Belgium and Switzerland.

Public hearings for the Swissair trial conclude on March 9, when the three-judge panel will start discussing the case behind close doors. It was unclear when a verdict could be announced.

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 after buying stakes in numerous loss-making airlines, including Belgium’s Sabena and Poland’s Lot, in an attempt to form its own airline alliance.

Swissair left behind debts to the tune of SFr17 billion ($13.7 billion) and 5,000 jobs were lost.

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.

The Trial

The proceedings, which began at the Bülach district court on January 16, are due to finish on March 9.

Questioning of the accused was completed on February 5.

The trial in Bülach at a hall with a capacity of 1,500 people is open to the public.

The prosecution indictment is 100 pages. There are 4,150 files in the case.

The Zurich cantonal prosecutor has spent 40,000 working hours on the case, questioning 300 people and searching 20 houses.

A first version of the charges put forward on March 30, 2006 was rejected because it was faulty. The revised version was handed in on December 31.

The Zurich cantonal prosecution authorities are currently preparing a civil indictment in the Swissair case.