Along with Prince Aquan and several other merfolk, Princess Finella fell under a trance as soon as the Skylanders arrived in the kingdom, and swam out of the kingdom. It was later revealed that they were being controlled by Captain Grimslobber, who was using a cursed artifact called the Fish Master's Crown to control any creature of the sea. Using the crown's power, Grimslobber enslaved the merpeople and forced them to haul out gem-eels and ship them to the surface where the evil pirate captain would become rich.
Thanks to Gill Grunt, the merpeople, including Prince Aquan and Princess Finella, were freed from the spell of the Fish Master's Crown and later helped the Skylanders battle Grimslobber by tilting the sea dog's pirate ship to disorient the crew onboard. Prince Aquan and Princess Finella presumably returned to their kingdom afterwards along with the other merfolk.