The Mad Monkey was a legendary sunken ship with a valuable monkey shaped figurehead.
Guybrush dive into ocean depths searching Monkey Figurehead.
It is unknown why it sunk but the author of Great Shipwrecks of Our Century knew where it was. With the help of that book, Guybrush Threepwood hired Kate Capsize's service Capsize Charters to go in search of it in Monkey Island 2 in order to retrieve the Monkey Figurehead.
Trivia[]
A tribute to Monkey Island is made in The Sea of Thieves with the appearance of a ship derelict, supposed to be the Mad Monkey, rechristened as the Headless Monkey. The theme of Monkey Island is heard while the player walks around it; inside one can find a map of the Tri-Island Area. The layout and graphics have a cartoony falir.
In the logs we learn that Kate Capsize would find and repair the ship; she attempted to use it to track down Guybrush at the Sea of Thieves as revenge for him framing her for his crimes, but it wound up shipwrecked near the literal ghost town of the Sailor's Grave, killing Kate and her crew and leaving the ship damaged beyond repair.