Cruises cut short as bank seizes liners

Passengers of the Rembrandt had no choice but to leave the cruise ship and board buses

In this story: Bank: Others ready to seize ships 'We thought it was a joke' RELATED STORIES, SITES

CAPE CANAVERAL, Florida (CNN) -- Some 2,800 passengers aboard Premier cruise liners had their vacations cut short Thursday when financial problems forced the company to shut down.

The bank that holds the mortgages on the ships repossessed them in ports outside the United States. Four ships were seized; a fifth ship used by Premier on a charter basis was also out of service.

"No one will be stranded, and everyone will end up back where they began," said Alan Twaits, senior vice president and general counsel for Premier.

Premier President Bruce Nierenberg, said the company's mortgage holder, New York-based Donaldson, Lufkin and Jenrette ( DLJ), decided Wednesday night to seize all Premier-owned ships due to the company's failure to pay its bills.

Nierenberg said the ships were taken to international ports so that DLJ can sell them. He said passengers were being flown home at DLJ's expense.

Bank: Others ready to seize ships

Two Premier ships were docked in Halifax, Nova Scotia -- the Rembrandt and the Seabreeze. Another ship -- the Big Red Boat III, also called the Island Breeze -- was seized in Cozumel, Mexico, but is continuing to Nassau in the Bahamas. Twaits said that 100 passengers voluntarily disembarked that ship in Mexico, but the remaining 300 are continuing to Nassau, where the ship will be docked.

A fourth ship, the Big Red Boat I, also called the Oceanic, was already docked in Nassau. The fifth ship, the Big Red Boat II, was a charter used by Premier. Passengers on that vessel also had to disembark in Halifax, and officials said Thursday evening the ship was headed back to New York.

The Rembrandt was seized by sheriffs and docked in Halifax, Canada

"They [DLJ] were the first mortgagers on the ships and they've been involved in the company for some time," said Nierenberg. He said DLJ went through "the normal legal channels."

Catherine Conroy, director of corporate communications for DLJ, said the bank decided to act Thursday after hearing that "several parties" were maneuvering to seize the ships. "We decided to act quickly in the passengers' best interests," Conroy said, adding that DLJ had the resources to fly passengers back to their original ports.

Returning to the airport in Orlando, Florida, after her cruise to the Bahamas was cut short, passenger Tania Carter said she was "very upset" with Premier.

"Last night after the comedy show, we found out the boat had been repossessed. They gave us plane tickets and let us come home," Carter said.

'We thought it was a joke'

A passenger returning to Cape Canaveral said the captain came on the speaker late Wednesday night to tell them they'd have to leave the ship. "We thought it was a joke at first," she said.

Callers to Premier's phone number in Cape Canaveral Thursday were greeted with the following message: "To our loyal passengers and customers, we regret to inform you that Premier Cruise Lines was forced to suspend operations of all of its vessels indefinitely. Our lender has taken possession of our ships pursuant to the ships' mortgages. Procedure for refunds covered by the Federal Maritime Commission surety bond will be forthcoming and will be available in the near future by calling the existing Premier phone numbers."

A representative with Cruise Planners travel agency in Coral Springs, Fla., said the agency had passengers booked on the Premier ships.

While she said she did not know the specifics of the problems the company faced, she said, "We were alerted through the industry last week that they were experiencing some difficulties. But that was a rumor and we can't go by rumors alone."

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Premier Cruise Lines
  •  Rembrandt ship
  •  SeaBreeze ship
  •  Big Red Boats
Donaldson, Lufkin & Jenrette
Federal Maritime Commission

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