Value Recapture Partners has lost its securities-fraud lawsuit against Boeing and former chief executive Dennis Muilenburg after an Illinois federal judge ruled that the investment firm lacked standing because it had never purchased Boeing shares. The case concerned alleged misstatements about the safety, design and certification of the 737 MAX, as well as Boeing’s response to two fatal crashes, the fleet’s grounding and its return to service.
Chief U.S. District Judge Virginia M. Kendall dismissed the action with prejudice on 15 October, preventing Value Recapture from filing another amended complaint in the district court. She applied the U.S. Supreme Court’s 1975 Blue Chip Stamps v. Manor Drug Stores precedent, which generally limits private securities-fraud claims to investors who bought or sold the securities concerned.
The claims originated with two funds managed by Valinor Capital that purchased Boeing stock in 2019. The funds assigned their claims to Value Recapture in July 2020 while winding down their operations. Value Recapture, which acquires legal recovery rights from investment funds, filed the lawsuit in December 2023.
Kendall had dismissed the initial complaint in February but allowed an amended filing. The revised case again failed to establish standing. The judge did not rule on Boeing’s separate arguments that the claims were time-barred or lacked merit. Value Recapture can appeal to the U.S. Court of Appeals for the Seventh Circuit.