Bankruptcy judge gives Long Beach legal control of Queen Mary; owner of Russian sub still a mystery

The city of Long Beach has gained official, legal control of the Queen Mary following a judge’s approval in Delaware bankruptcy court on Wednesday.

Long Beach took physical control of the Queen Mary last month when former leaseholder, Urban Commons Queensway, chose to give up the lease after the ship received no qualified bidders at bankruptcy auction.

Long Beach owns the Queen Mary but for years has leased the ship as a hotel and tourist attraction to various operators that have struggled to make a profit.

In January, Eagle Hospitality Trust, the parent entity of Urban Commons Queensway, filed for Chapter 11 bankruptcy with a total of more than $500 million in debt. The city, meanwhile, remains in a legal battle with Urban Commons over a litany of failed lease obligations, with a court hearing scheduled for August.

The bankruptcy judge on Wednesday granted Urban Commons’ request to officially cancel the Queen Mary lease, a move that gives Long Beach complete control of the vessel for the first time in more than 40 years.

The city is now tasked with deciding how much to invest in critical repairs for the aging vessel. An inspection report in April determined the ship would need at least $23 million in critical repairs to remain viable in the next two years, while a marine survey released in 2017 found that the ship could need nearly $300 million in critical repairs to stay viable.

The ship remains closed to the public as the city plans for millions of dollars in safety repairs.

Long Beach, in the meantime, is exploring possibly transferring control of the Queen Mary to the Harbor Commission, which oversees the Port of Long Beach. The city is expected to release a feasibility study on the plan in the next several weeks.

The city had also asked the judge to rule on who is responsible for the corroded Russian submarine moored next to the Queen Mary. But in Wednesday’s court hearing, the city said that Urban Commons has agreed to give details on who possesses or owns the rusting relic. 

City officials have said the owner of the Scorpion is somewhat of a mystery as the vessel was supposedly sold in a private transaction and is not part of the bankruptcy hearing. Urban Commons in court documents has said it does not own the sub.

In 2019, the sub’s then-owner, a Palm Springs-based company called Newco Pty Ltd., was reportedly in the process of selling the vessel to a mystery buyer, but it is unclear if that sale went through. Robert Lisnow, a lawyer for Newco Pty, could not be reached for comment.

The Cold War-era Scorpion, which has been closed to visitors since 2015 due to safety concerns, has been largely neglected over the past several years as city inspection reports revealed rust and even a raccoon infestation.

The city in court documents said the sub has become a hazard and that removing it will likely cost millions of dollars.

Long Beach takes control of Queen Mary in bankruptcy court

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Kelly Puente is an award-winning general assignment and special projects reporter at the Long Beach Post. She has worked as a journalist in Long Beach since 2006, covering everything from education and crime to courts and breaking news. Kelly previously worked at the Long Beach Press-Telegram and the Orange County Register before joining the Post in 2018. She is currently pursuing a master’s degree in public policy and administration at Cal State Long Beach. Reach her at [email protected].
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