January 1, 796 S.C. / 487 I.C.: in the Astarte star system, a 20 000 spaceships Imperial fleet under Reinhard von Lohengramm's command is about to be cornered by three Alliance fleets of 13 000 spaceships each. Against the advice of his subordinates, Reinhard decides to strike first in order to defeat each fleet before they can join. The Allied commanders, trusting the overall odds of 2 to 1, don't anticipate this and rebuff Yang Wen-li's advice to quickly regroup their forces.

After the destruction of the 4th and 6th fleets, Reinhard's fleet engages the 2nd Fleet. When its commander is wounded, Yang takes command and manages to escape utter destruction. In Phezzan, Adrian Rubinsky, administrator of the planet, and Nikola Boltik, his main adviser, make comments on the battle and note that it won't change the strategic situation.

Paul von Oberstein, chief of staff of the Iserlohn fleet, is in trouble. He saw through Yang's plan, but his commander didn't listen to him, and he fled before the destruction of the fleet. The three chiefs of the Imperial fleet resign, but want to make him responsible of the defeat. Oberstein meets Reinhard and explains how, like him, he hates the high nobles and the Goldenbaum dynasty, and offer his help. Reinhard agrees and obtains his pardon by advising the Emperor to refuse the chiefs' resignations.