The Kate Kelly’s many accidents raise questions about her management, which was rather fluid, to put it mildly, during the Robert Hayes era. Charles Parker, who, according to the enrollments, owned the largest share of the vessel during the mid-1870s, died during the summer of 1874. The family’s small shipbroker business fell into the hands of Parker’s son. When the elder Parker died, the owners should have applied for a new enrollment for the Kate Kelly. They did not, an omission that suggests sloppy or possibly dishonest business practices.

The poor management eventually caught up with the Kate Kelly’sowners. On October 22, 1877, William H. Wolf and Thomas Davidson, operators of a large Milwaukee shipyard, filed a libel suit against the schooner for non-payment of debts. Wolf and Davidson contended that they were owed $875 plus interest for repairs and supplies they provided to the vessel in October 1876. At the time of her arrest, the Kate Kelly was at Cleveland, recovering from yet another mishap. On October 13, the schooner was carrying 380 tons of iron ore from Ogdensburg to Cleveland and ran aground on a sandbar. To float the vessel free, the crew threw fifty tons of ore, worth well over $200, into the lake. The procedure in this situation involved arresting the vessel and, if payment was not made, selling it at a federal pubic auction, popularly called a Marshal Sale.

Captain Hayes, court records reveal, had left a long stack of unpaid bills in Milwaukee and Chicago. When notice of Kate Kelly’s arrest appeared in the newspapers, six other creditors presented bills. The sum total for action, including court costs, totaled $5,580, a figure considerably more than the schooner’s value. The largest claim against the vessel, $3,735, came from Goble and McFarlane, the shipbuilders who had rebuilt Kate Kelly two years before. The Wolf and Davidson claim, including interest, came to $927. Other bills were presented for ship equipment, groceries and supplies, trimming (loading) a cargo of grain, and for the recently jettisoned iron ore. With pending bills far higher than the Kate Kelly’s value, her owners made no effort to pay off the creditors.