The Enterprise Chamber of the Amsterdam Court of Appeal said there was no basis to order an inquiry into Philips' management of its 2021 recall of sleep apnea and ventilator devices. While the recall coincided with a sharp drop in the stock, the chamber emphasized that sufficiently reliable research pointing to health risks from the PE-PUR foam only became available in early 2021. It also said it had no good reason to conclude Philips' communications to investors were "late, incorrect, or misleading."
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The investors' lobby VEB, together with multiple institutional backers, contended that weaknesses in Philips' internal controls delayed detection and remediation of the issues, and that the board was aware of problems at U.S. unit Respironics sooner than it acknowledged. The chamber summarized those claims, but said there is "no reason to assume that Philips ought to have intervened at Respironics earlier, or that the Supervisory Board exercised insufficient oversight." It added there are no indications the executive and supervisory boards received the relevant health risk information too late. The chamber did not decide whether errors occurred at Respironics or who might be liable for investor losses.
Philips launched the recall in 2021, covering roughly 3.5 million breathing machines, after the polyester-based sound-dampening foam was found to degrade over time, potentially allowing users to inhale or ingest toxic or carcinogenic particles. In 2024, Philips reached a US settlement valued at $1.1 billion to settle class-action claims connected to the recall involving its sleep apnea and ventilator devices. Philips said it welcomed the Amsterdam ruling, and a spokesperson said the company's priorities are patients and customers, alongside speeding up profitable growth.
VEB did not provide an immediate response to a request for comment made outside normal business hours. For your wallet, the headline is clarity is improving but not complete: shares are still down 6.3% this year, and the long-term story hinges on execution and any remaining legal overhang.
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