Boeing 2010 Annual Report Download - page 114

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During the third quarter of 2010, plaintiffs filed a motion seeking reconsideration of the summary
judgment decision.
The second action, initiated in 2007, alleges collective bargaining agreement breaches and ERISA
violations in connection with alleged failures to provide benefits to certain former employees of the
Wichita facility. Discovery in the case is ongoing. Spirit has agreed to indemnify Boeing for any and all
losses in the first action, with the exception of claims arising from employment actions prior to
January 1, 2005. While Spirit has acknowledged a limited indemnification obligation in the second
action, we believe that Spirit is obligated to indemnify Boeing for any and all losses in the second
action.
On October 13, 2006, we were named as a defendant in a lawsuit filed in the U.S. District Court for the
Southern District of Illinois. Plaintiffs, seeking to represent a class of similarly situated participants and
beneficiaries in the Boeing Company Voluntary Investment Plan (the VIP), alleged that fees and
expenses incurred by the VIP were and are unreasonable and excessive, not incurred solely for the
benefit of the VIP and its participants, and were undisclosed to participants. The plaintiffs further
alleged that defendants breached their fiduciary duties in violation of §502(a)(2) of ERISA, and sought
injunctive and equitable relief pursuant to §502(a)(3) of ERISA. During the first quarter of 2010, the
Seventh Circuit Court of Appeals granted a stay of trial proceedings in the district court pending
resolution of an appeal made by Boeing in 2008 to the case’s class certification order. On January 21,
2011, the Seventh Circuit reversed the district court’s class certification order and decertified the class.
The Seventh Circuit remanded the case to the district court for further proceedings.
BSSI/ICO Litigation
On August 16, 2004, our wholly-owned subsidiary, Boeing Satellite Systems International, Inc. (BSSI)
filed a complaint for declaratory relief against ICO Global Communications (Operations), Ltd. (ICO)
in Los Angeles County Superior Court seeking a declaration that ICO’s prior termination of two
contracts for convenience extinguished all claims between the parties. On September 16, 2004, ICO
filed a cross-complaint alleging breach of contract, economic duress, fraud, unfair competition, and
other claims. ICO added The Boeing Company as a defendant in October 2005 to some of these
claims and for interference with contract and misappropriation of trade secrets. On January 13, 2006,
BSSI filed a cross-complaint against ICO, ICO Global Communications (Holdings) Limited (ICO
Holdings), ICO’s parent, and Eagle River Investments, LLC, parent of both ICO and ICO Holdings,
alleging fraud and other claims. The trial commenced on June 19, 2008, with ICO seeking to recover
approximately $2,000 in damages, including all monies paid to BSSI and Boeing Launch Services, plus
punitive damages and other unspecified damages and relief.
On October 21, 2008, the jury returned a verdict awarding ICO compensatory damages of $371 plus
interest, based upon findings of contract breach, fraud and interference with contract. On October 31,
2008, the jury awarded ICO punitive damages of $236. On January 2, 2009, the court entered
judgment for ICO in the amount of $631 which included $24 in prejudgment interest.
On February 26, 2009 the trial court granted in part and denied in part post-trial motions we filed
seeking to set aside the verdict. As a result, on March 3, 2009, the court entered an amended
judgment for ICO in the amount of $604, which included $371 in compensatory damages, $207 in
punitive damages and $26 in prejudgment interest. Post-judgment interest will accrue on the judgment
at the rate of 10% per year (simple interest) from January 2, 2009. As of December 31, 2010, the
amount of post-judgment interest totaled $121.
We filed a notice of appeal and ICO filed a notice of cross-appeal in March 2009. As of November 1,
2010, the appeals were fully briefed. No date has been set by the court for argument. We believe that
we have substantial arguments on appeal, which we intend to pursue vigorously.
102