At 06.04 hours on 8 Jun, 1941, the unescorted Dirphys was hit amidships by a G7e torpedo from U-108 about 600 miles east of Newfoundland. The ship broke in two and sank after a boiler explosion. The Germans tried to question the survivors, but most of them were swimming in the water or clinging to debris and were picked up by the only lifeboat that could have been launched.

On 10 June, the U-boat encountered this lifeboat again and this time took a German speaking radio operator (Robert Conine from Hasselt, Belgium) aboard for questioning. He told them that he had been three months in prison in Liverpool after the Secret Intelligence Service filed a charge against him because he had met a former crew member of Admiral Graf Spee in Rosario and asked to be taken home, but the commander refused. The Germans gave the radio operator the course to the nearest coast and sent him back to the boat, which was provided with water, bread, two bottles of rum, aspirin and a box of matches.