A criminal trial over the collapse of Switzerland's national air carrier, which began this week in a Zurich suburb, may help define the extent to which Swiss boards can be held accountable by investors and stakeholders.

Most shareholders of SAirGroup, the holding company for Swissair, have long written off their investment after the corporate icon went bankrupt in October 2001. However, the trial may set an important precedent regarding the liability of directors and executives over what ended up as the country's largest corporate collapse--estimated at CHF 17 billion ($13.6 billion).

Nineteen former directors, executives, and outside advisors are on trial on charges that they breached their fiduciary duties by granting fraudulent authorizations, making false reports, and committing personal income tax fraud, among other crimes.

After originally being rejected by a court as too broad, the case was re-filed in July 2006 by the office of the state prosecutor for financial crimes for the Canton of Zurich. The office has set up a separate team focused exclusively on investigating the circumstances surrounding Swissair's collapse.

The current criminal case is the result of only the first half of the team's investigation. Prosecutors expect to file a second criminal case based on violations of accounting rules, at the earliest in the second half of the year. According to Bloomberg News, the trial is the first time that outside directors have faced criminal charges for their involvement in a Swiss corporation's failure.

The list of defendants reads like a who's who of Swiss industry. Those being prosecuted include Mario Corti, a former CFO of food multinational Nestlé; Eric Honegger, a former director of Swiss banking giant UBS and former government official for the Canton of Zurich; Lukas Muehlemann, a former CEO of both Credit Suisse and insurer Swiss Re; and Thomas Schmidheiny, the former chairman and CEO of cement conglomerate Holcim.

Because of the precedent-setting nature of the trial and the stature of those targeted, commentators have compared the proceedings to Germany’s Mannesmann trial, in which Josef Ackermann, the powerful chairman of Deutsche Bank, and other members of Mannesmann's supervisory board, were accused of illegally approving payments made to Mannesmann executives during a 2000 buyout by Britain's Vodafone. That trial had wide-ranging implications for the German market and helped spur best practice regulations including those to improve pay disclosure.

Germany's Lufthansa agreed to buy Swiss International Air Lines, Swissair's successor airline, in 2005. However, Karl Wuethrich, the liquidator appointed to oversee the winding up of SAirGroup, has filed a number of civil proceedings to recover damages on behalf of former creditors and shareholders, in parallel with the criminal case now underway.