Richard Branson, Virgin Group being sued by former CEO of Norwegian Cruise Line
12 Mar 2015
UK billionaire Sir Richard Branson and his Virgin Group are being sued by the former chief executive officer of Norwegian Cruise Line, who claims that Virgin essentially stole his ideas and business plans to enter the lucrative luxury cruise industry by building a pair of state-of-the-art ships capable of carrying 4,200 passengers each.
The lawsuit, filed yesterday in Miami federal court on behalf of Colin Veitch and his VSM Development company, sought $300 million in damages and called on a judge to stop Virgin from going ahead with its recently announced cruise line.
Veitch's attorney, Jeff Gutchess said in an interview Virgin accepted Veitch's ideas in early 2011 but did a sudden about-face by forcing a costly renegotiation of their partnership terms.
According to Gutchess, Veitch had spent a year on developing the concept but got nothing for it.
In December, Virgin announced the formation of Virgin Cruises, which planned to sail out of Miami. It was one of the newest of Branson's numerous ventures, which include airlines, space travel, a music label, book publishing, a travel agency, hotels and mobile phone services.
According to the suit, by abrogating the original agreement and moving forward with the plan based on the ideas that Veitch gave, Virgin was guilty of theft.
He added, under the new terms offered by Virgin, Veitch would essentially end up as an employee with a profit share that would be determined by Virgin alone.
In a statement, Virgin said, ''Richard Branson and the Virgin Group first looked at the cruise market in the late 1970s, and our current team has been exploring the opportunity for more than a decade.
"Over the years, we have been in discussions with a number of parties including the plaintiff, and those discussions ceased in 2012. We strongly believe the claim has no merits.''
Virgin is looking to leverage its global brand name recall to break into the cruise industry. It plans to introduce two so-called 'ultra' ships capable of carrying around 4,500 passengers each. Two such ships were already in service with Royal Caribbean.
The suit comes only three days before Branson was due in Miami to witness the Virgin car racing team compete in an all-electric Formula ePrix championship.
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