Proactive Investors - Boeing Co (NYSE:BA) has sued Richard Branson's Virgin Galactic over allegations that it refused to pay more than $25 million and mishandled trade secrets.
The lawsuit was filed last week by Boeing and its Aurora Flight Sciences Boeing subsidiary, according to report by SpaceNews.
Virgin Galactic (NYSE:SPCE) signed up Aurora in 2022 to design and build two new 'mothership' aircraft to replace its current VMS Eve aircraft, with the first to be delivered in 2025.
Aurora and Boeing claims that Virgin Galactic has stopped paying for design work after work ended when Aurora, according to the filing, "concluded that it would not be possible for Virgin Galactic to produce the new Mothership Virgin Galactic wanted, on the budget available to it, on the timeline Virgin Galactic hoped to meet".
The claim states that roughly US$26.4 million remains unpaid despite multiple requests.
Furthermore, Boeing and Aurora allege that Virgin Galactic has refused to trade secrets, namely special equations used to model aircraft performance that were shared as part of the project, as well as data from tests of a composite material.
“These equations allow Boeing and Aurora to model aircraft stability and control with exceptional accuracy beyond that which is commonly available in the aerospace industry,” the lawsuit states, adding that despite asking Virgin Galactic to destroy the documents that contain those equations, Virgin claims it had intellectual property rights to them as part of the agreement.
A Virgin Galactic spokesperson said the company believes the lawsuit is "wrong on the facts and the law", and will "vigorously defend ourselves in the appropriate forum".
In November, the company announced a temporary pause in space flights from mid-2024 as part of cost-cutting measures to enable it to prioritise the development of its new Delta launch vehicle.