During the night of 25/26 Sep 1941, both ships ahead of Lapwing (Master Thomas James Hyam) in station #13 of convoy HG-73 were torpedoed and the vessel stopped to launch a lifeboat with six men for rescue work. The boat brought 17 survivors from Petrel and three from Cortes to Lapwing, then returned to pick up more survivors from Petrel from a raft. In the meantime HMS Larkspur (K 82) (Lt S.C.B. Hickman, RNR) came across the stopped vessel (not identified at that time), assumed that it had been torpedoed and set one of her cutters adrift to help the survivors because she had orders to return to convoy. At 04.01 hours, U-203 fired one torpedo at the corvette lying close to a stopped tanker but it missed, like the spread of two G7a torpedoes fired three minutes later. Apparently these attacks remained unnoticed aboard the corvette while the U-boat left the area at full speed and dived to reload the torpedo tubes.

When U-203 returned to the area, they found the stopped Lapwing again which was just about to recover her lifeboat with the remaining survivors, but before this could be done the ship was hit amidships by one torpedo at 06.34 hours and sank within 3 minutes north-northeast of the Azores. Only three crew members from Lapwing, the three survivors from Cortes and one survivor from Petrel survived the sinking and were picked up by the lifeboat, which made landfall at Sylne Bay, Co. Galway on 9 October. But two survivors from Cortes and one survivor from Petrel died of wounds and exhaustion in the boat and the last survivor from Cortes later died in a hospital, only nine crew members from Lapwing and nine survivors from Petrel survived.

After the corvette returned to convoy, her report of a disabled ship behind convoy started a salvage operation and the rescue tug HMS Zwarte Zee (W 163) was sent out with HMS Leith (U 36) (LtCdr E.C. Hulton, RN) as escort with a Catalina aircraft searching the area. The sloop did find one final survivor from Lapwing at the sinking position, but nothing else so the search was broken off in the evening on 2 October.