Friday, September 29, 2006 Queen Mary sale steams ahead   By Wendy Thomas Russell Staff writer LOS ANGELES - In some ways, the bankruptcy case involving the company that leases the Queen Mary is sailing along at a steady clip. In the last few days, several potential bidders have met with the company's trustee about their respective plans for the ship - meetings that have left officials feeling more encouraged than ever that the bankruptcy proceedings will end in a successful sale of the lease. But the controversy over development rights of the land surrounding the Queen Mary is another story. Queen's Seaport Development Inc., the bankrupt company that leases the city-owned ship, has been involved in a long-standing dispute with Bandero LLC, a minority shareholder that claims it paid QSDI $1 million to acquire development rights to the adjacent property in 2003. On Thursday, U.S. Bankruptcy Court Judge Vincent Zurzolo threw some tacit support behind Bandero's claim that the company may have a legal stake in the property. QSDI and its bankruptcy trustee, Howard Ehrenberg, contend that Bandero's money bought the company the right merely to participate in development discussions. And the city of Long Beach, too, claims Bandero did not properly acquire any development rights, a move city officials say they must approve as part of the lease with QSDI. In cross-complaints filed this summer in the bankruptcy case, the Las Vegas-based Bandero sought money damages from QSDI and shareholders Joseph Prevratil and Paul Leevan; and sought transfer approval for the development rights from the city. The defendants filed motions to dismiss those claims, but Zurzolo on Thursday found that enough evidence existed to let the litigation move forward, at least in part, said Deputy City Attorney Charles Parkin. Essentially, Parkin said, the judge found that "it's premature to dismiss or ban (Bandero's) cross-complaint at this stage of the proceedings," Parkin said. "I don't think anybody gained a big advantage or lost anything significant today." Parkin acknowledged, though, that Bandero would have suffered a significant set-back had the motions been granted. Bandero founder Lee Durst could not be reached for comment. In the meantime, Ehrenberg said, several "highly qualified people" are putting together bids for the Queen Mary lease, and he said he hoped to have a proposal in writing soon. The bankruptcy court has ordered the trustee to identify potential bidders who could take over QSDI's lease and develop the property around the Queen Mary. Any recommended bidder will be subject to the judge's approval. Wendy Thomas Russell can be reached at wendy.russell@presstelegram.com or (562) 499-1272.