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The Chiss Secession Crisis was a conflict in the Unknown Regions in 25 ABY, part of the Chiss Civil War. When four Chiss Ruling Families seceded from the Ascendancy to the Empire of the Hand, the Ascendancy declared war. The Chaf and Nuruodo families were fragmented, some supporting the Hand and some supporting the Ascendancy. The only major battle was the Battle of Copero, in which the Ascendancy tried to regain their previous shipyard. There were no casualties, as Grand Admiral Mitth'raw'nuruuodo refused to fight back. He convinced the Chiss leaders to sign the Treaty of Copero, in which the Ascendancy chose join the Hand.
Cover story[]
Because Thrawn wanted the Empire of the Hand's existence to be a secret, he chose to create a cover story for the crisis. The original Thrawn had taken measures to avoid knowledge of the Empire of the Hand's existence getting out. His clone took similar measures. They decided that they wanted the galaxy to believe that the Hand had been absorbed by the Ascendancy. That is what Aristocra Chaf'orm'bintrano told Jedi Master Luke Skywalker.
The cover story claimed that [From Wookieepidia] the aftermath of the Third Vagaari War saw the Ruling Families of the Chiss Ascencancy recruit a labor-force from the hive-minded Killik nests. In spite of extensive precautions, two of the Families became Joiners in the Colony, and three others became heavily dependent on Killik labor; a "disagreement" arose with the other surviving Families, who had been less compromised by the Killiks, and who allied with the Household Phalanx to remove the three Killik-dependent lineages from power.
However, the account given by Chaf'orm'bintrano is not without its problems, and may be at least partially misinformation: Formbi himself was a member of the Chaf family, a lineage that was not among the list of four Ruling Families cited in a study produced by the University of Sanbra in the last years of the New Republic. All that can be said for sure is that the number of Ruling Families was apparently reduced substantially between 22 ABY and 29 ABY, and at the same time, the rogue Chiss warriors of the Household Phalanx previously affiliated with the Empire of the Hand appear to have integrated themselves into the Chiss Expansionary Defense Force.
Now, none of this was true. The Chiss planets that became Joiners did not have ruling families on them, and the Phalanx was still under the Hand, though they did now have formal connections with the CEDF. Additionally, due to the large number of recruits for Thrawn's Phalanx, not all could serve with him at the same time, leading to some serving in other parts of the military, including under the Ascendancy at times.