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Cruise Ship Co. Goes Belly-Up

Television personality Mary Hart arrives at the 18th Annual Palm Springs International Film Festival 2007 Gala Awards Presentation held at the Palm Springs Convention Center on Jan, 6, 2007 in Palm Springs, Calif.
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Add another chapter to this summer's travel woes.

More than 2,800 cruise ship passengers from four luxury ships were dumped on shore, their vacations ruined in Canada, Mexico and the Bahamas, after Premier Cruise Lines abruptly suspended operations Thursday.

The cruise ship company of Port Canaveral, Fla., shut down after its primary lender seized the ships, which had been put up for collateral.

The Rembrandt, with 850 passengers, was seized by Nova Scotia sheriffs and the Seabreeze, with 450 passengers, was seized in Halifax harbor.

In Halifax, the seizures caused pandemonium on the dock, where confused and irate passengers begged reporters to use their cell phones to call home. Angry passengers said they were given just 15 minutes to collect their belongings and leave their ships.

"This is a disaster," Karen Ledet, a passenger from New York City, said Thursday afternoon. "I just don't believe anything (the crew) is saying."

One British man who asked not to be identified yelled for someone to call the British consulate, saying they were being held hostage.

Other passengers reacted more calmly.

"This is our first cruise," stranded passenger Jolene Carlton said. "I'm sure we'll try it again. It's got to go up from here."

The Oceanic was impounded in Nassau in the Bahamas. The Big Red Boat III was seized the same day in Cozumel, Mexico.

Travel agents said it's unusual for cruise lines to go belly-up in the middle of a trip.

In the Bahamas, 600 passengers, many dragging luggage and with children in tow, were put ashore in Nassau then told flights to Florida would be available on a first come, first serve basis.

From Orlando, Fla., buses came to take them to Port Canaveral, the start of the cruise, where they arrived late Thursday and were left scrambling to find accommodations for the night.

"We haven't had anything to eat or drink but coffee since 5 a.m.," Tina Thomas of Murfreesboro, Tenn., said after arriving in Port Canaveral.

Said Nancy Carr of Orangeburg, S.C., "They treated us like a bunch of refugees."

At a telephone news conference in Port Canaveral, Fla., Alan Twaits, a Premier vice president, said: "No passengers were stranded."

The decision to seize the ships came after the New York investment firm of Donaldson Lufkin Jenrette learned that other creditors might be trying similar moves, Catherine Conroy, a senior officer at the firm, said during the news conference.

"We acted quickly to lay claim to the ships first, and to get the passengers back to their home ports," she said.

Most of the Halifax passengers were flown back to their home ports, but several hundred were allowed to board Premier's Big Red Boat II for a return cruise to New York.

The Big Red Boat II, also known as the Edinborough Castle, is owned by Oceanic Marine Ltd. and wasn't subject to the seizures. But Ocanic Marine notified Premier that given the company's financial troubles, it was pulling the ship from Premier's service and taking its passengers home, Twaits said.

The Big Red Boat III, sailing out of Houston, was in Cozumel when seized. About 100 passengers opted to fly back to Texas from Mexico, while another 300 or so chose to stay aboard as the investment firm sent the ship to Nassau for temporary storage, Twaits said.

The ship is expected in Nassau on Saturday, and the passengers will then be flown back to Texas, he said.

The shutdown cost up to 270 jobs at Premier's Port Canaveral headquarters, Twaits said. They were given final notice when they reported for work Thursday.

A simple recording was all that was left Thursday at the office.

"To our loyal passengers and customers, we regret to inform you that Premier Cruise Lines was forced to suspend operations of all its vessels indefinitely," it said. "Our lender has taken possession of the ships pursuant to the ships' mortgages."

The company had dismissed nearly 10 percent of its work force in June in an effort to cut company costs amid ongoing financial losses.

The company lost $20 million last year, company officials said.

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