Canada Jetlines has announced that it commenced legal proceedings against David Neeleman. The company is suing the WestJet co-founder and his affiliates for interference and other violations.
What’s the claim?
According to a press release, David Neeleman, DGN Corporation and Breeze Aviation Group, Inc. are all facing legal action. Jetlines claims that the three entities infringed on the airline’s business.
“The Company has commenced legal proceedings in the United States District Court (District of Connecticut) against David Neeleman, DGN Corporation and Breeze Aviation Group, Inc. for tortious interference with business expectancy and violation of the Connecticut Unfair Trade Practices Act,” part of the press release states.
Additionally, the official complaint letter is attached to the statement. This document goes into the specific reasons why the parties are being sued. Jetlines claims that those that are being accused tried to destroy the relationships between the recently-founded airline and an investment bank.
The bank ultimately terminated its engagement to assist Jetlines in raising new investment capital, which is essential to its ability to commence operations as an ultra-low-cost carrier. Reportedly, Neeleman and his associates deliberately induced Jetlines’ Chief Executive Officer Lukas Johnson to take part in secret communications that Neeleman knew to be in breach of the businessman’s duties to Jetlines.
The complaint goes on the state that Neeleman sabotaged the plans in order to assist the launch of his own new airline venture, Moxy. Jetlines feels that the move then forced a downward spiral, causing damage to its reputation and bank account.
“Among other things, Jetlines’ reputation in the airline and financial industries, and with prospective investors, was injured; Jetlines’ ability to obtain crucial financing commence flight operations and earn related revenues was delayed; Jetlines’ lease agreement for certain aircraft was terminated, causing it to lose $2.2 million in non-refundable deposits; and the amount of financing available to Jetlines was significantly reduced,” the firm’s representatives stated in the complaint.
Since Jetlines is still in its incubation stage, any investment opportunity can be crucial to its development. Therefore, if there was any detrimental interference, it is understandable why the airline would want to get lawyers involved. Along with Moxy and WestJet, Neeleman also co-founded Morris Air, JetBlue and Azul. Therefore, his presence is highly influential within the aviation industry.
Last month, the firm announced that it was unable to secure C$40 million in funding from two investment groups. This meant that it could not take delivery of its first two Airbus A320s. Subsequently, its planned December 17th launch date had to be indefinitely postponed.
Simple Flying reached out to Canada Jetlines for further comment on the situation but did not hear back before publication. We will update the article with any further information.
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