Former Norwegian Cruise Line CEO Sues Virgin Group Over Cruise Line

Photo (c) Shutterstock/Prometheus72
Photo (c) Shutterstock/Prometheus72

ReutersBy Zachary Fagenson

MIAMI, March 11 (Reuters) – The former chief executive of Norwegian Cruise Line Holdings Ltd sued Richard Branson’s Virgin Group in federal court in Miami for $300 million on Wednesday over plans by the British billionaire to launch his own luxury cruise line.

The lawsuit by Colin Veitch, who oversaw Norwegian from 2000 to 2008, claims that Virgin muscled him out of a joint venture to break into the industry with massive ships capable of carrying thousands of passengers and operating as floating resorts, according to court documents.

Veitch alleges he presented to Virgin in 2011 a plan to launch a new cruise line focused on two “ultra ships” that would give it a foothold in the hard-to-enter but highly profitable luxury cruise industry, according to the complaint.

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,” Virgin Group said in an emailed statement on Wednesday.

“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 Group announced the Bain Capital-backed cruise line project last December. The company is in the midst of negotiating a deal worth more than $1 billion for two ships, Branson told British newspaper The Daily Telegraph in an interview earlier this week.

As CEO of the new Virgin Cruises Branson hired Tom McAlpine, former president of the Disney Cruise Line, a unit of Walt Disney Co.

In the complaint Veitch accuses Virgin of breach of contract after he said they agreed to a partnership deal that would net him about $315 million over 10 years.

“Upon recognizing the potential for Virgin Cruises to be one of Virgin’s ‘biggest, sexiest businesses,’ however, the dark side of Virgin quickly emerged,” the filing says, citing language used by Branson in a video shot in 2012.

Veitch claimed that Virgin later began altering the deal to diminish his earnings and leave him as “an indentured servant whose ownership and rewards depended completely upon Virgin’s whims.”

Virgin went from “brand partner to bully,” the complaint alleges. (Editing by David Adams and Eric Walsh)

© 2015 Thomson Reuters. All rights reserved.