Tour boats seized in loan default

Associated Press

Two tour boats owned by Dream Cruises were seized by the U.S. Marshals Service yesterday because the company was in default of a $1.4 million mortgage on the vessels, according to officials and court documents.

The American Dream in Kewalo Basin and its sister ship, the Kona Dream in Kona, won't be allowed to operate until court proceedings are completed, a spokesman for the service said.

About 75 employees are affected.

Dream Cruises President Michael Watson said he was surprised by the action. He acknowledged being a couple of months late on payments, but said he was in discussions with the lender for a new payment plan.

Watson said he planned to meet with attorneys last night in hopes of resuming business today.

On Feb. 28, a 22-year-old Japanese man died after leaping into the ocean from the 77-foot American Dream. In 2003, a 3-year-old boy was fatally injured when the vessel collided with a humpback whale.