A federal bankruptcy judge issued a $250-a-day fine to former operators of the Queen Mary who are accused of stealing $2.4 million from a COVID-19 relief loan meant to pay their employees during the pandemic, the Los Angeles Times reported. The judge’s order on Tuesday arrives amid a bankruptcy proceeding over how a real estate firm maintained the aging ship as part of a lease agreement with the city of Long Beach, which owns the ship and a parcel of land around the port. Urban Commons set its sights on revamping the retired British ocean liner as a tourist destination, but within five years of the company taking over the lease, a real estate investment trust it had created filed for bankruptcy, leaving behind a trail of debt. Beginning in 2016, Urban Commons held a 66-year lease to operate the Queen Mary and develop the surrounding land. It created Eagle Hospitality Real Estate Trust as an investment entity to generate revenue from the Queen Mary’s role as a hotel and from other hospitality ventures, but in January of this year, the trust filed for bankruptcy protection with roughly $500 million in debt. The Queen Mary is in poor shape. This year the city of Long Beach took back control of the ship after Eagle Hospitality Trust filed for bankruptcy. A recent report estimated it could cost the city $175 million to preserve the ship and $190 million to scrap it or sink it. A 2017 report estimated $289 million worth of renovations and upgrades were required to keep the ship afloat.
