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...I can honestly say that I paid to let her go, thinking that Peer should die afterward, but she ends up in the tavern with nothing :confused:. ....
I clarified this point with Horn back when I was new to the online game, after I found myself in a similar situation. The 3DO players acted quite fairly: if you want to leave your opponent without a hero, you have to lose your own; if you let the elementals destroy your troops, both Taz and Peer would disappear (that's what happened to us with the Town Guard in the group stage of the qualifiers); if someone escapes or pays to leave, both heroes end up in the tavern, and the one with the elementals is left with nothing.