At 08.08 hours on 31 March 1942 the unarmed tug Menominee (Master Leslie F. Haynie) towing three barges at 5 knots, was attacked by U-754 with gunfire about 9.5 miles east-southeast of Metopkin Inlet, Virginia near the mouth of Chesapeake Bay. The U-boat was spotted coming from the the port bow and fired three rounds at the tug from about 50 feet. One entered the cabin of the master through a window, destroyed the radio equipment and passed through the starboard bulkhead without exploding. The tug immediately cut loose the barges and tried to escape at 11 knots. The U-boat came along the port side of the barges and fired three or four rounds at each barge, then went up the starboard side and down to port side, again firing as it went. The tug was then chased by U-754 and sank immediately after being hit four times. Seven of the five officers and 13 crewmen managed to leave the vessel, but only the master and the chief engineer reached two rafts and were later rescued by the American motor tanker Northern Sun, transferred to the US Coast Guard motorboat USCGC CG-4345 near Brown Shoal and landed at Lewes, Delaware.

The U-boat then returned to the barges and fired about a dozen more shells, sinking the Allegheny and the Barnegat and damaged the Ontario, which stayed afloat on her load of lumber. The three crewmen from the latter barge had abandoned the vessel and were picked up one mile offshore by the US Coast Guard motor lifeboat USCGC CG-4063 from the Metopkin Inlet Lifeboat Station. In the meantime, the six men from the other two barges boarded the anchored Ontario and were taken off the by the same motorboat about eleven hours after the attack. All survivors were taken first to the US Coast Guard station at Metopkin Inlet, before going on to the Naval Operating Base at Norfolk, arriving on 1 April.