On 28 Dec 1942, HMS Fidelity (D 57) (Cdr C.A.M. Péri) fell behind convoy ONS-154 due to engine troubles and streamed its torpedo nets, which brought down her speed to 2-3 knots. The next day, the commander decided to head for the Azores and launched her motor torpedo boat HMS MTB-105 and a Kingfisher floatplane for anti-submarine patrol. The aircraft spotted two lifeboats of Empire Shackleton which were towed by the two landing craft to HMS Fidelity. 43 survivors were picked up and the aircraft and the landing craft were lifted aboard again.

At 21.38 hours on 29 December, U-225 (Leimkühler) fired the stern torpedo at HMS Fidelity, but missed. U-615 (Kapitzky) observed the suspicous vessel during the day and attacked her with five single torpedoes between 22.00 and 23.00 hours, but they either missed or were caught by the torpedo nets. At 16.38 hours on 30 December, the vessel was finally hit by two torpedoes from U-435 and sank immediately after heavy detonations. The U-boat reported a surprising high number of survivors on overcrowded rafts and swimming in the water, none of them were rescued and all drowned in the worsening weather. 274 crew members, 51 Royal Marines and the 43 survivors were lost. The landing craft HMS LCV-752 and HMS LCV-754 on board were lost with the ship. The engines of the MTB broke down and the crew of eight men was later rescued by HMCS Woodstock (K 238) (T/A/Cdr G.H. Griffiths, RCN), which then scuttled the disabled vessel. They were the only survivors apart from two men that had been picked up by HMCS St. Laurent (H 83) (A/Cdr G.S. Windeyer, RCN) after the other Kingfisher floatplane from the vessel crashed on take off on 28 December.