Last updated: 01:33 PM ET, Tue March 17 2015

Travel Insights: The Man Behind the $300 Million Virgin Cruises Suit

Cruise Line & Cruise Ship | James Shillinglaw | March 17, 2015

Travel Insights: The Man Behind the $300 Million Virgin Cruises Suit

The last time I saw Colin Veitch he was dancing up a storm after midnight during the christening event for Norwegian Gem. Veitch, then president and CEO of Norwegian Cruise Line, was responsible for modernizing Norwegian's fleet by introducing four ships in the Jewel class.

Indeed, I always thought Veitch was one of the smartest and most innovative cruise executives around—and always good for a great quote for a story. He was an executive vice president at Princess Cruises before getting the Norwegian job, and was noted for his aggressive, outspoken, and innovative leadership.

Yet, despite the new ships, Norwegian never really made any money. During the same period, Veitch also was responsible for an ill-fated effort to put three dedicated ships in the Hawaii cruise market. At the time, it appeared Norwegian had a monopoly on a seemingly very popular cruise product, but in the end the economics in Hawaii just didn't work for Norwegian. The line was required to have American-built ships and an American crew to sail in Hawaii—and that ultimately didn’t justify having three ships in that market.

Shortly after the Norwegian Gem christening, Norwegian was sold, in part, to Apollo Management and Veitch resigned as president and CEO, but went away roughly $10 million richer, according to company documents, under a severance agreement. Then he virtually disappeared—or so we thought. There were rumors he had invested in some kind of condo resort down in the Miami area and some just thought he'd disappeared with his millions.

Now it turns out that Veitch was apparently involved in helping to develop Virgin Cruises. In his lawsuit filed in federal district court in Miami on March 11, he maintains that Virgin CEO Richard Branson cut him out after he created the business plan to form the new line. Veitch claims he planned the start-up operation, lined up financing to build the first ship, and worked out a tentative commitment with a German shipyard. He is asking for $300 million in damages, and also wants the court to shut down Virgin Cruises.

Veitch reportedly maintains he brought the idea for Virgin Cruises to Branson and the two entered a partnership in early 2011. Branson then renegotiated the terms and turned Veitch into an employee rather than a partner, according to the lawsuit, but Veitch maintains he's actually the founder of the line.

Virgin Cruises was launched in December with former Disney Cruise Line President Tom McAlpin as CEO, Bain Capital as an investor, and plans for two ships. But now there may be a hitch in that strategy until the lawsuit is resolved in some way.

How involved Veitch really was in creating Virgin Cruises remains to be seen, or at least decided by the courts, though I was always impressed by his knowledge of cruising and his business acumen. Whether the suit ends up delaying or halting Virgin Cruises' plans also won't be clear for some time. But one thing's for certain: This lawsuit was timed to have maximum effect since it was filed just before this week's Cruise Shipping Miami conference. My guess is that it will be the talk of the conference no matter what.


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