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Delta Air Lines has enlisted the services of renowned attorney David Boies to seek damages from CrowdStrike and Microsoft following a major software outage that led to widespread flight cancellations and substantial financial losses.
CrowdStrike shares experienced a drop of up to 5% in after-hours trading on Monday following the news of Delta’s legal maneuver, while Microsoft’s stock remained relatively stable.
The incident, which occurred on July 19, was triggered by a software update from CrowdStrike that caused a significant outage of Microsoft systems. This disruption impacted numerous industries, with airlines suffering particularly severe consequences. Delta was notably affected, resulting in thousands of flight cancellations and significant service failures. The Department of Transportation is investigating the incident’s impact on Delta.
CrowdStrike’s market value fell by nearly 25% over two trading days as concerns about the company’s operations arose from the outage. Delta, which has not yet filed a lawsuit, is preparing to pursue compensation for the estimated $350 million to $500 million in losses incurred. The airline is also addressing over 176,000 refund or reimbursement requests related to the nearly 7,000 canceled flights.
David Boies, chairman of Boies Schiller Flexner, is well-known for his high-profile legal work, including representing the U.S. government in its antitrust case against Microsoft and overturning California’s ban on gay marriage. He has also represented controversial figures such as Harvey Weinstein and Theranos founder Elizabeth Holmes.
Insurance startup Parametrix has estimated that the CrowdStrike-related incident resulted in a total loss of $5.4 billion for Fortune 500 companies, excluding Microsoft’s direct losses.