The ship, a decorated World War II craft, has been rotting in the Patapsco River for 18 years, neglected and abandoned until it was finally sold at court-ordered auction in October to Potomac Navigation Inc. The Delaware-registered company planned to tow the M/V Sanctuary to Greece in December, but it has been delayed by costly legal wrangling with the U.S. government.

So far, the back-and-forth has cost Potomac, which paid $50,000 for the vessel, more than $1.5 million, the company's New York attorney, Lawrence Kahn, said yesterday.

The Sanctuary became the subject of U.S. concern after the Basel Action Network, a Seattle environmental group, publicly questioned whether the ship could be bound for a developing nation. The group feared that it would be dismantled without costly remediation and sold as scrap for a quick - and hefty - profit, thereby violating regulations that prevent the export of toxic materials.

Potomac has consistently stated that it doesn't want to scrap the ship, but instead turn it into a floating hotel or storage facility after remediation by a Greek specialist. Kahn reiterated those intentions yesterday, saying the company will remove any toxins safely and legally. But members of BAN are skeptical.

"Despite the owner's claims, we never believed for a minute that this ship was destined for anywhere other than the breaking beaches of India, Pakistan, Bangladesh or Turkey where the PCBs and other toxic materials would contaminate foreign workers and the environment," BAN coordinator Jim Puckett said in a statement. "Never again should our old toxic ships be exported, nor should they end up at the bottom of the sea by target practice or as artificial reefs."

In the fall, the EPA obtained an injunction to prevent the ship from leaving U.S. waters. It also obtained a warrant to search the vessel for polychlorinated biphenyls, or PCBs. The chemicals were routinely used years ago to fireproof materials but have since been linked to cancer, neurodevelopmental changes and reproductive toxicity.

Andrew Ames, a spokesman for the Department of Justice, said the EPA found nonliquid PCB levels that were higher than regulations allow, along with "1,800 pounds of liquid coolant with a high concentration of PCBs."

The lawsuit, filed Wednesday in U.S. District Court in Baltimore, seeks to prevent Potomac from moving the ship abroad in violation of the Toxic Substances Control Act. It also would require the owners to drain and dispose of all liquid PCBs "and to clean up any PCBs that have leaked from it."

The lawsuit is the latest in a decades-long saga to find a home for the storied ship, which earned 11 battle stars for service in the Vietnam War. It was put under the care of the U.S. Maritime Administration in its retirement and sold to a humanitarian group in 1989 for $10. The group intended to turn the Sanctuary into a floating rehabilitation center but never met its goal, passing the vessel on to a second-generation group, which abandoned it at the North Locust Point Marine Terminal, Pier 5.

A year ago, the Sanctuary broke free of its moorings, leading the U.S. Coast Guard to label the ship "an unacceptable risk to the port of Baltimore."

The Maryland Port Administration asked the Maritime Administration to reclaim the ship, but the agency refused. So the port filed a complaint in District Court, which led a judge to order its sale at auction.

Potomac, which is owned by a U.S. citizen living in Greece and identified in court papers as Nicholas Couchell, is appealing the November injunction. Kahn said there is no basis for the new lawsuit.

"Potomac still wishes to use the vessel as a ship; there are no plans whatsoever to dismantle the ship," Kahn said. "Potomac plans to handle all hazardous materials on board the vessel in a reasonable and law-abiding manner."

The EPA is taking the position that the more than 60-year-old vessel must be dismantled, though Kahn disputes that.

"We think that there may be ways to contain and/or remove PCBs and still be able to modify the ship," he said. "The vessel has another 50 years to it, and that's a long time to earn revenue."

tricia.bishop@baltsun.com