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Swissair CEO could get 6 months in jail

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Mon February 19 2007, 02:14 PM
CD
Swissair CEO could get 6 months in jail
Swissair CEO could get 6 months in jail
Prosecutors push for harsh sentencing in mismanagement case

The Associated Press
Updated: 4:10 p.m. ET Feb 19, 2007

BUELACH, Switzerland - Prosecutors proposed a six-month prison sentence for Mario Corti, the last chief executive of the now defunct Swissair, and a range of suspended sentences for 18 other airline executives, board members and consultants.

The defendants in Switzerland's largest corporate trial have all pleaded innocent to charges that include damaging creditors, mismanagement, making false business statements and forging documents. Some have blamed the big Swiss banks and the Sept. 11, 2001, attacks for the airline's downfall.

Creditors and others damaged by the airline's collapse will present their case first, followed by the defense. Public hearings 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.

Swissair was grounded abruptly on Oct. 2, 2001, after months of financial problems led to it 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 on Monday said that Corti, who was the last chief executive of parent SAirGroup, and the group's former head of finance Jacqualyn Fouse had failed to take action following the company's insolvency, and therefore caused "immense damage."

They were too late in filing for protection from creditors "” a step short of bankruptcy under Swiss law "” which led to a loss in liquidity of $143 million, the prosecution said.

Corti had released false information to the public covering up the extent of the financial problems, state prosecutor Ralph Ringger said.

Prosecuting Attorney Christian Weber said that, as the main person responsible for the collapse, Corti should be sentenced to 28 months in prison, but that 22 months of that sentence should be suspended.

Weber also demanded a penalty of $875,000 for Corti, which also would go unpaid after three years of good behavior, but that Corti be fined $8,100.

For all of the other defendants, prosecutors requested suspended sentences ranging up to 18 months, penalties up to $585,000 and fines up to $16,200.
Tue February 20 2007, 04:05 AM
BF
Chris, thanks for posting this. Somehow I'm very doubtful that Corti will spend 6 months in jail. Also, the fines are laughable and I would be surprised if they even have to pay that.
Wed February 21 2007, 06:37 PM
Murray
Wow.... 6 whole months I don't know how he'd stand it.

/sarcasm.


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