Philanthropist was having a bad day, and with only one home planet with 3 ships, started an encounter against Squee, risking everything he could spare (2 ships). Being so low on ships, he didn't dare not invite Animal, so Animal joined in with 2 more ships. Squee's power then required Philanthropist to throw 3 ships into the Warp to continue the attack. Philanthropist chose yes, and threw all his ships into the Warp!

We then had an attack where:
Offense has 0 ships
Offensive ally has 2 ships
Defense has 3 ships

This raises many questions:

1. Can a player remove ships from the hyperspace gate when taking losses (for any reason)?
2. Can Squee's Power cause this to happen?
3. Can attacks (in general) continue if the Offensive Player loses all ships before cards are revealed?
4. Can attacks (in general) continue if only Offensive Allies have ships remaining before cards are revealed?
5. If no, does the Encounter end?
6. If the Encounter ends in this way, do the Offensive Allies return the ships to their Colonies (as if the Main Players started a Negotiation, and Allies go home)(This is how we resolved it the interest of finishing the game quickly).

I believe these are important questions because they cut to the core mechanics.

I would love to hear an official ruling from FFG on this.

1. Yes

2. Yes

3. Yes

4. Yes

5. NA

6. If offfense won with 0 ships + allies + card beating Defense total, the ally gets on the defensive planet

7. If Defens won, the alliy ships go to the warp

8. Allies only go back to their planets if the offense and defense are negotiating

9 Cute, huh?

1. There is nothing in the rules saying a player can't remove ships from the hyperspace gate when taking a loss. So, yes it is permitted.

2. Squee does this as part of its Unimaginable Cuteness.

3. Yes, the attack does continue even if the attacker has no ships. Though I could swear there was a power that could also remove ships from the hyperspace gate and if no attacker ship remained the encounter was over, but that was listed on the alien power card making it the exception.

4. Yes, since the attack continues even if the allies are the only ones remaining. (This happens when the defense is defending against a planet with no ships on it).

5. It's been established that the encounter won't end.

6. The attack would continue with Philanthropist and Squee playing an encounter card and continue the encounter as usual. If I were Philanthropist, I would have played a low encounter card in an effort to send Animal's ship to the warp. If Philathorrist won, Animal would have gotten the planet.

The answers above are correct, but it's also worth noting that some other effects which cause ships to be lost specifically say "from colonies." Squee is not one of these effects, so the Squee-affected ships indeed can (and sometimes must) be lost from the hyperspace gate, as the others have said above. Squee's text even has a little reminder of this when it says "any three of his or her ships." (Which means the ships could probably even be lost from a tech card they are researching, although the rules about about ships researching tech are not as clear as they might seem on first glance, or maybe even a weird place like the Alliance hazard card. It does say "any.")

But I digress. My point is, on some effects the text is more restrictive. Here are a few examples:

• Shadow: "Whenever any other player's color or a special destiny card that targets another player is drawn from the destiny deck, use this power to choose one of that player's ships from any colony of your choice and send it to the warp." (Note how Shadow's own text disproves the rulebook's incorrect example of Shadow removing a ship from a tech card.)
• Ying-Yang: "Each main player who has a yin-yang token when his or her opponent loses ships to the warp from the encounter must lose an equal number of ships from his or her colonies."
• Classic Edition Wild Empath: "As a main player, for the rest of this encounter, you may remove one ship from any colony (your choice) to the warp from each other player who does not say "Sir" or "Ma'am" (whichever is appropriate) each time he or she speaks."

So again, the answers given earlier are still correct, but are not to be taken as an absolute statement for all game effects. You always have to read the texts carefully.