In a bizarre midnight scenario, law enforcement officers in three countries seized the 17-year-old line's five ships and disrupted the vacation plans of 2,400 passengers already sailing on the high seas.

The vessels were commandeered in the Bahamas, Canada and the United States after Donaldson, Lufkin & Jenrette filed court papers alleging Premier had defaulted on its August payment due on mortgages held by the New York investment banking firm. The amounts involved were not immediately disclosed.

The ships were confiscated in Nassau; Halifax, Nova Scotia, Canada; and at Port Canaveral, Brevard County, about 50 miles south of Downtown Orlando. Premier flew the stranded passengers back to Orlando. Most of Premier's 250 employees were immediately dismissed.

Premier's failing finances began emerging in 1998 when the company lost $70 million. Last year, the line was $20 million in the red. The firm markets itself as "The Big Red Boats Company."

Among the ships seized are the S/S Oceanic, taken over in the Bahamas, and the Rembrandt and SeaBreeze, stopped in Canadian waters. Two other assets are at Port Canaveral, Premier's home port since 1983.

Premier officials declined comment but maritime sources familiar with the company's financial straits tell GlobeSt.com the investment banker's action may have been extreme. Premier could have been recapitalized, they surmise.

Instant Insights /

New York Banker Seizes Premier Cruise Lines' Five Ships for Missing August Mortgage Payment

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