At 19.36 hours on 29 Mar, 1942, the unescorted City of New York (Master George T. Sullivan) was hit by one G7a torpedo from U-160 about 40 miles east of Cape Hatteras, while she steamed in twenty-foot seas on a nonevasive course at 14 knots. The torpedo struck after a running time of just 29 seconds at the #3 hold just below the bridge on the port side at the waterline. The armed guards fired twelve shots with the 4in gun on the poop (the ship was also armed with four .50cal and four .30cal guns) at the periscope. The U-boat circled the stern at a distance of about 250 yards and fired off the starboard quarter a coup de grâce that struck the starboard side at #4 hold, causing the ship to sink stern first after 20 minutes. The most of the 13 officers, 70 crewmen and 41 passengers abandoned ship in four lifeboats, the nine armed guards jumped off the ship as water reached the after deck.

The next day, a PBY Catalina aircraft searched the area of the sinking but found no survivors. 36 hours after the attack, 70 survivors were picked up by USS Roper (DD 147), but one of them died on board and 29 others by USS Acushnet (AT 63) and were taken to the Naval Base in Norfolk, Virginia. On 11 April, an US Army bomber spotted the fourth boat at 38°40N/73°00W, it had contained 13 crew members, one armed guard and six passengers (four women, one man and a 3 year old girl), but five crew members, the armed guard, the man and two women died. The eleven survivors and two bodies (the mother of the child and the armed guard) were picked up by the US Coast Guard vessel USCGC CG-455 and were brought to Lewes, Delaware. In all, one armed guard, 16 crewmen and seven passengers died.

The next ship of master George T. Sullivan was the Daniel Morgan, which was dispersed from convoy PQ-17, bombed by German aircraft and sunk by U-88 (Bohmann) on 5 Jul, 1942.