Creditor Seizes Premier Cruise Lines’ 5 Ships

Premier Cruise Lines, the world’s fifth-largest cruise-ship operator, said it had “entered receivership” and that investment bank Donaldson, Lufkin & Jenrette Inc. had seized its five vessels.

The ships, which had been sailing in the Caribbean and off Nova Scotia, are in port or on their way back to port, where the passengers will be provided with transportation home, Premier attorney Alan Twaits said in a conference call with reporters.

About 250 workers at Premier’s offices in Port Canaveral will be laid off, he said.

More than 2,800 Premier passengers were forced ashore at ports at Cozumel, Mexico; the Bahamas; and Halifax, Nova Scotia, on Canada’s Atlantic Coast.

Port officials in Halifax said that more than 2,000 passengers were grounded there after three Premier ships--the Rembrandt, SeaBreeze and Big Red Boat 2--were taken over by the Sheriff’s Department of Halifax.

Passengers said one of the luxury liners, which are favored by families and older travelers, was making its way along the Canadian east coast when the captain told them Wednesday night that the ship would have to dock at Halifax. Some passengers said they were allowed just 15 minutes to gather their possessions.

Donaldson, Lufkin & Jenrette, which holds Premier’s mortgage debt, moved to seize the ships late Wednesday night after learning that other creditors also were considering seizing them, a DLJ spokeswoman said.

Premier had been in negotiations with creditors to sell ships and refinance its debt, Twaits said.

“Up until late [Wednesday], the company had been in negotiations with the lender and several third parties over sale of vessels and a restructuring and refinancing of the company,” Twaits said on the conference call. “Those efforts did not succeed.”

Affected passengers can apply for refunds, Twaits said.