The Queen Mary’s bankruptcy trustee agreed today to pay AAC Shoreline $1.15 million to settle that company’s last-minute legal claim against former leaseholder QSDI, tentatively removing a stay by the ninth circuit court that had held up the final sale of the ship’s lease for more than a week, The District has learned.

“We’re pleased to have a settlement that will remove the final obstacle to concluding the sale of the lease,” said Howard Ehrenberg, who has been shepherding the Queen Mary through complicated proceedings since Joe Prevratil of QSDI filed for bankruptcy in March 2005. “Of course, we’re somewhat disappointed we have to pay money to get the stay lifted.”

The settlement must still be approved by a bankruptcy judge at a hearing scheduled for Thursday at 10:30 a.m., but Ehrenberg said he anticipates no problem with that — nor with any other potential obstacles to a long-awaited conclusion of the Queen Mary bankruptcy. There is no word about how this settlement might affect the City of Long Beach’s multi-million claim against QSDI.

Save The Queen, a development consortium headed by Jeff S. Klein of Orange County, bid $43 million in a two-minute auction on August 14 for the lease to operate the Queen Mary and develop 64 adjacent acres. He and Ehrenberg had until Monday, Oct. 22, to close the deal.

“Leases, licenses, subleases and a myriad of details all had to be settled and transferred to a new owner,” said Ehrenberger. “We thought we had tied up all the loose ends. But at the last minute — Friday, Oct. 19 — AAC Shoreline won its stay.”

AAC Shoreline was a sub-sub-tennant of the lease — that is, a tenant of a subtenant called Bandero, which claims it purchased 24 percent of QSDI, an option to buy more and certain development rights. AAC Shoreline says it had a contract with Bandero to construct certain improvements–that it had paid money to Bandero for a sublease — and demanded that it be compensated for this. Ehrenberg agreed to the tune of $1.15 million.

Bandero has filed a similar — but much more expensive — suit against Klein and Save The Queen, claiming it has a valid lease with QSDI, that it has invested $12.5 million in the Queen Mary property and demanding compensation of at least $4.4 million. Sources close to the company were bouyed by today’s settlement.

“If AAC was entitled to some of the bankruptcy proceedings because of its lease with Bandero, then that would seem to indicate that Bandero’s lease is valid,” said the insider, who spoke on the condition of anonymity. “And Bandero is owed much, much more.”

Ehrenberg dismissed such speculation.

“I’m not even going to comment,” he said, “except to say that it is not going to impact the sale.”

Tags: AAC Shoreline, Bandero, Howard Ehrenberg, Joe Prevratil, QSDI, Queen Mary