General

Virgin’s plan to enter into cruise business prompts lawsuit

Business disputes arise in a variety of situations. We have previously written about disagreements that arise as a result of a breach of contract. Other times they are filed following an allegation of theft. Sometimes, it is multiple issues that prompt one individual or entity to take legal action against another. This is the case in a lawsuit recently filed in a federal court in Florida. Virgin Group and British billionaire Richard Branson have been sued by the former chief executive office of Norwegian Cruise Line.

The lawsuit is the result of a failed agreement between the former chief executive officer of Norwegian Cruise Line, and Virgin. The former CEO said he brought the idea of building and operating two “ultra” ships to Virgin, which previously had not been involved in the cruise business.

In May 2011 an agreement was allegedly entered into. At that time it was estimated that over the course of 10 years Virgin would make profits between $427 million and $483 million. Depending on the profitability of the venture, the former CEO potentially could have made $315 million.

In accordance with that agreement the former CEO said he found a shipyard to build one of the ships and secured financing for it. He claims it was around that time that his potential profitability in the project changed as a result of changes Virgin made to the terms of the deal.

In the lawsuit the former CEO is seeking to block Virgin from pursuing the new cruise line. In addition, he is also seeking $300 million.

We will provide updates on this matter as they become available.

Mon Aug 27, 2:29pm