At 07.58 hours on 9 Apr, 1942, the unescorted and unarmed Malchace (Master Arnt Magnusdale) was torpedoed by U-160 about 25 miles off Cape Lookout, while steaming a nonevasive course at 10.7 knots. One torpedo struck on the port side forward fo the #4 hatch and just below the waterline. The cargo of soda ash cushioned the blast and this lessened the effect of the explosion. The U-boat surfaced and circled the ship slowly, waiting until the crew had abandoned ship and fired at 08.16 hours a coup de grâce that struck on the port side aft of the #3 hold. A hole was blown in the bulkhead and the engine room flooded, causing the ship to sink in shallow waters about two hours after the first hit. The eight officers and 21 crewmen abandoned ship in one lifeboat and a raft after the second torpedo hit. This explosion blew four men off the poop deck into the water, one crewman drowned. The survivors were picked up by the Faja de Oro (en route from Tampico to Baltimore) seven hours after the attack, transferred to a US Coast Guard patrol boat inside Cape Henry and landed in Norfolk.

The master, Arnt Magnusdal, experienced another sinking when his next ship, the Jeremiah Wadsworth was sunk by U-178 (Ibbeken) on 27 Nov, 1942.