Episode 42, "The Legitimate Galactic Empire Government"
Synopsis: Peaceful days pass at Iserlohn, until suddenly Chairman Job Trunicht on Heinessen announces the "liberation" of Erwin Josef II and the establishment of the Legitimate Galactic Empire government-in-exile in the Alliance, sending waves throughout the base. Yang discerns that this situation is to Reinhard's advantage and that he may have had something to do with the abduction. Merkatz is in a difficult situation, as he has been named the Minister of MIlitary Affairs for the government-in-exile. Reinhard von Lohengramm announces in a public broadcast his intention to punish the Alliance.