Mystic - A local company has foreclosed on a $2.5 million mortgage it made to the owner of the tall ship Mystic after the firm failed to make its monthly payments for more than a year.

The maritime attorney for the company that holds the mortgage, Lignum Vitae LLC of Holmes Street, said Monday the 170-foot-long, three-masted schooner will likely be sold to pay off the mortgage.

John Senning of Essex said the question of whether the schooner would operate this year and where it would do that depends on if it can be sold.

Amalia Blumberg, the managing partner of Mystic Schooner Line LLC, the owner of the ship, could not be reached to comment Tuesday. A 2007 story in The Bay Weekly, a Maryland newspaper, said it had always been Blumberg's dream to build and sail her own large schooner.

Blumberg operates Voyager Cruises on Holmes Street, where she runs trips aboard the Mystic and the smaller schooner Argia. The lawsuit does not affect the Argia. Senning stressed the Mystic should not be confused with the Mystic Whaler, a different vessel that operated for years out of Mystic but is now based in New London.

The Mystic was built in 2007 in Florida and has been operating out of Mystic since. It is docked here now even though its schedule had called for it to be in the Out Islands of the Bahamas until May 1.

During the summer months it runs two- to five-day trips along the New England coast for up to 34 guests. In October if operates out of Baltimore, Md., and then moves to the Bahamas Out Islands for the winter months. It can also carry up to 150 passengers on day sails and evening cruises, according to the Voyager Cruises Web site.

The Web site also lists a 2009 schedule that includes June and July trips along the New England coast, a voyage to Europe later in the summer and then fall voyages in the Caribbean.

The lawsuit by Lignum Vitae and its managing partner, Geoffrey Jones, states that in May 2007, Mystic Schooner Line took a $4.1 million, 20-year mortgage from the company.

The principal was reduced to $2.3 million when Mystic Schooner Line obtained a $1,876,000 mortgage from the U.S. Small Business Administration and used it to lower the principal on its debt to Lignum Vitae.

Lignum Vitae is now seeking $2,259,913 in principal, $232,586 in interest and $83,600 in fees for a total of $2,576,096.

The lawsuit states Mystic Schooner Line has failed to make any payments on the principal and interest since Jan. 1, 2008. The mortgage allows Lignum Vitae to seek repayment of the outstanding principal and interest if a payment is missed. Lignum Vitae is also seeking $47,672 in advances to Mystic Schooner Line to care for the vessel.

Senning said even though the mortgage was in default for many months, Lignum Vitae did not take action until it could not hold off any longer. He said the boat, which had financial problems, was built at the wrong time, just as the economy began to falter.

If Mystic Schooner Line could raise the money to pay off the mortgage the sale could be stopped, but he said the chances of that are virtually nil in the current economy.

Senning said where the boat will go and when or if it operates again depends on who buys it. He said one possible market is the Mediterranean Sea. He said there are potential buyers there for a boat with the character and design of the Mystic.

”That's where a lot of foreclosed boats in this market are going,” he said. “There are potential buyers in foreign countries.”

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