Court records suggest that problems plagued the Kate Kelly partnership. The younger Parker, half owner, appears to have been insolvent by this time, and Henry W. Green, owner of a quarter share of the schooner, indicated that “he might secure his own interest, but would do nothing to benefit Parker.” For his part, Captain Hayes, who owned the final quarter of the vessel, admitted that the claims against the vessel were just and accurate but indicated that he was “unwilling and unable” to pay the creditors. The vessel went on the auction block on November 6, 1877, and sold to George Goble and James McFarlane for $3,000.

The Kate Kelly’s new owners had little in common with Robert Hayes and his associates. The Ireland-born Goble was one of Lake Ontario’s most respected shipbuilders and had been a fixture on the Oswego waterfront since the late 1830s. McFarlane’s father-in-law was F.G. Carrington, Oswego’s most prosperous businessman. The two successfully managed the Kate Kelly for more than fifteen years. During the 1880s and early 1890s, the British Whig, a Kingston newspaper, intermittently recorded the schooner’s travels, cargoes, and occasional problems. During the Goble and McFarlane era, the Kate Kelly made frequent trips carrying corn or wheat between Chicago and Kingston.

Even under solid management, sailing ships on the Great Lakes faced constant dangers. The potential for problems mounted as ships aged. In September 1881, the Kate Kelly lost her fore boom during a storm. Five years later, in 1886, part of her foremast and her main topmast tore away during a June squall. Later that summer, the aging vessel discharged 8,500 bushels of wet wheat, a sure sign of hull problems. Major groundings, a frequent occurrence on the Kate Kelly under Captain Hayes, appear to have happened only once during the Goble and McFarlane years. On November 13, 1882, the vessel ran aground during a blow on Lake Ontario. A rescue party that included 30 men and a powerful tug lightered 5,000 bushels of wheat from the schooner and pulled her from the shore. In 1890 in Detroit, James O’Hara, a forty-year-old sailor from Rochester, died when he fell from the main boom on the Kate Kelly while furling a sail.