Case History: Freighters belonging to C. L. Magnus are being hijacked by Redbeard the pirate. The gang visits Magnus, who explains that his ancestors were the ones who brought the pirate to justice, and that the ghost is revenging himself. Piloting a small boat and blaring the recording of a foghorn, the gang lures Redbeard away from another Magnus freighter but are themselves rammed by the ghost ship. Clambering aboard, Scooby and Shaggy are menaced by a flying cutlass before being captured by Redbeard. Meanwhile, Freddy and the girls discover tubs of dry ice in a storeroom; Redbeard finds and locks them inside.

Redbeard threatens Scooby and Shaggy with the plank but spares them after they offer to become his cooks. They whip up a batch of Ghost Pirate Stew out of seawater, chains, ashes from the stove, cobwebs and soap, but are forced by the pirate to eat it themselves. They lay down a screen of bubbles escape. They avoid two crewmen when Shaggy dons a paper pirate hat and pretends to be Redbeard, but, while hiding under an upside down tub, they topple overboard and must paddle after the ship, which is steering into a secret cove on Skull Island.

Redbeard chains up Freddy, Daphne, and Velma, but they escape and hook up with Shaggy and Scooby. Examining the pirate hat Shaggy is still wearing, Fred and Velma discover that it is a ship's manifest—a list of cargo being carried by a freighter—for a ship not due to sail for another night. Following a set of tire tracks, they find a secret warehouse (opened by the password "Yum yum yum and a liverwurst a la mode!") containing all the stolen loot. They capture Redbeard with the help of a jackhammer and rendevouz with the Coast Guard. Redbeard is unmasked as Magnus, who had been hijacking his own ships and stealing the cargo in order to get cash to avoid bankruptcy.

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