At 10.35 hours on 14 Jan 1945, U-1232 attacked convoy BX-141 east of Halifax, sank the British Freedom and badly damaged the Martin Van Buren six minutes later. The U-boat then sank the Athelviking and missed HMCS Ettrick (K 254). Dobratz reported the sinking of four ships totalling 30.400 grt.

The Martin Van Buren (Master James Howard Hiss Jr.) had been in station #71 of the eight column convoy, but convoy had formed a single column after passing the Sambro lightvessel and was now in station #4. The British Freedom ahead of the ship was torpedoed and the Liberty ship had to avoid a collision by a hard steering manoeuver to starboard. Just as she swung back to port to regain her station, one torpedo struck near the stern post slightly to port. The explosion blew off the rudder and propeller and the crew had to secure the engines immediately. Four armed guards from the after 5in gun were blown overboard, three of them drowned. The hull cracked abreast of the #3 hatch across the deck and extended down both sides below the waterline. A second crack appeared on the after deck between the #4 and #5 hatches on the port side and the strain caused the hull to bulge on the starboard side. The ship began settling slowly by the stern and listed sharply to port, but eventually righted herself, taking a slight starboard list.
The survivors among the eight officers, 33 crewmen, 27 armed guards (the ship was armed with one 5in and one 3in gun) and one passenger abandoned ship at 11.10 hours in four lifeboats and three rafts. They were picked up within two hours by HMCS Comox (J 64) and HMCS Fundy (J 88) and landed at Halifax the same day.

A tug took the Martin Van Buren in tow, but a naval vessel disregarded the lights of the tug and cut across the towing hawser. The master, six crewmen and four armed guards had left Halifax aboard another tug to reboard the ship, but were unable to board due to rough seas. The Liberty drifted the next day ashore near Sambro and broke in two, because no other lines were available. She was declared a total loss and later scrapped in place.