Legal proceedings against a private passenger train operator

Virgin Enterprises (UK) has initiated a legal action against the American private passenger train operator Brightline with the aim of recovering $ 251 million. That is how much the claimant assessed the damage done to the brand after Brightline pulled out of a 20-year deal. The events took place against the backdrop of a pandemic in 2020, informs railway magazine Railway Supply citing Railway Age.

private passenger train operator
Picture: www.railwayage.com

Brightline was reorganized into Virgin Trains USA under a 20-year license agreement signed in November 2018. The operator even renamed its main station Virgin MiamiCentral. However, the partnership was short-lived. Brightline announced its intention to withdraw from the agreement in April 2020, shortly after the Covid-19 pandemic cut off passenger traffic in Miami and West Palm Beach in March.

The lawsuit says Brightline told Virgin it would be terminating the agreement as the “Virgin brand had ceased to constitute a brand of international high repute, largely because of matters related to the pandemic.”

Virgin has accused Brightline of using the pandemic as an out, calling the claims about the brand’s reputation “cynical and spurious” and “completely false.”

The amount being sought by Virgin includes what it would have collected if the agreement had continued through to 2023, the earliest the deal could have been cancelled with a termination fee, which is included in the damages Virgin is seeking.

As part of the legal case, Virgin has asked a British court to determine whether the pandemic undermined its standing as “a brand of international high repute.”

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