American Leasing Companies Pay $165 Million to Settle Philippines Crash

CHICAGO, March 10 /PRNewswire/ -- The largest loss of life from an airline crash in Philippine history has led to an unprecedented settlement in Illinois that could change the way old airplanes are leased to developing nations. Donald J. Nolan of Nolan Law Group in Chicago acted as Lead Counsel and along with Sterns & Walker and Bowles & Verna, law firms in Northern California, led victims' families to a $165 million settlement for the deaths of 131 passengers and crew on Air Philippines Flight 541. O'Reilly & Danko, another California firm, was also involved in the case.

The wrongful death lawsuit was against Chicago-based AAR Aircraft & Engine Group and Fleet Business Credit Corporation. AAR and Fleet were the owners of the 20-year old Boeing 737 leased to Air Philippines that crashed on approach to Davao, Philippines on April 19, 2000.

According to Nolan, "These companies should never have leased the decrepit airplane to Air Philippines, an under-funded and unsafe start-up airline. Yet, more than 100 people died because the leased airplane was regarded as a profitable business venture, in which higher lease payments were gained because the airplane was going to a carrier in the developing world."

As further noted by Michael Verna and Gerald Sterns, "Faced with those circumstances, we felt these lawsuits would be handled more efficiently and effectively in the United States rather than the Philippines even though the defendants, AAR and Fleet (now part of Bank of America), fought vigorously to have the lawsuit moved to the Philippines."

"All the participants in the case and their records were located right here in the Chicago area," said Verna and Sterns. After several years of legal wrangling and an appeal, the legal team representing the families led by Nolan Law Group prevailed and the action remained in Illinois.

"One of the many lessons from this case is that a company leasing an aircraft has a duty to provide oversight to ensure that passengers fly on airliners with the latest equipment, the best maintenance and finest training available," Nolan declared. "Attempting to say, 'We leased it and relied on the governmental authorities of foreign countries to assure passenger safety' is not sufficient by a long shot in the United States or Illinois courts. In the future, lessors and owners will need to learn that 'oversight' does not mean to 'overlook.'"