When the heros and a lieutenant decide to fight and a location card is drawn, where are the lieutenant and its minions placed? Are they placed like reinforcements? If so, do they have to fly/swim to the hero's ship to fight?

They're placed just like every other monster (or ship in the case of the Ghost Ship) and they fight the same as well.

Thanks for the reply. This is where I'm confused. The locations show the placement for the ships in ambush/non-ambush situations. I cannot find any rules regarding placement of the ghost ship different from the above.

With Lieutenants, there is no ship, so where does the Lieutenant and its minions start? Do they start off the board edge, since the can swim/fly (pg.16)? Any board edge? This would allow them to set up right next to the hero's ship and board the next turn, but be immune from attach the hero's first turn (since the Lieutenant/minions are "off board")

What about ambushes? Can a Lieutenant ambush? Is so, it doesn't really provide any benefit, because the heroes can't attack the first turn anyway, see below...

So the issue is not how they move/fight, rather it's what are the guidelines for setting up the Lieutenant/minions since they don't have a ship to begin with. Using the reinforcement rules always gives them a first attack advantage, unless the heroes set up on the end of the ship farthest from the map edge, so the Lieutenant can't reach them the first turn.

Panzerdude said:

The Lieutenant and his minions start on any space at the edge of the map of the OL's choice (this means on the map). Rules p. 17:

Monster Setup
After the heroes are placed on the map, the overlord places the leader and his minions on the map. Figures without the Soar or Swim abilities must be placed on the NPC ship. Figures with the Soar or Swim abilities may be placed along any edge of the ocean map, but they must be at least five spaces away from the heroes’ ship. Large monsters must be placed completely on the map.

Therefore, heroes can attack the monsters first if the OL places them close enough to the ship.

A Lieutenant cannot ambush because he doesn't roll a die to do so, unless its Lieutenant card says otherwise (in RtL, Gata the White Death rolls a die to ambush).

Thank you. Great clarification on the rules...