Freehold's first battle occurred 19 Eleasis, 1372DR, when the fledgling settlement was attacked by gnoll slavers chasing escapees from a Mulhorandi caravan they had recently raided. The sole survivor, a man of Mulhorandi descent named Kehur, stumbled into Freehold by accident, following the smoke from the settlers' campfires, and begged for assistance. Not far behind Kehur were the gnolls, and conflict was inevitable.

The battle was short but vicious, leaving several settlers wounded and all of the gnolls dead, including their fiend-blooded leader, a dangerous shaman. It was considered strange at the time that the gnolls' equipment was superior in both quantity and quality to the gear typically carried by that race, and a note was discovered among the slavers' possessions describing a bounty offered for trophies of various local monsters—unusual for a region largely ruled by powerful nonhuman beast-chieftains.

In the aftermath of the clash, Ash Nahcomence, Lysander Arkaine, and Samuel Fisher set out to track the gnolls back to the site of their raid on the caravan, only to discover that a contingent of gnolls who had remained with the caravan had already slain, eaten, or made off with most of their prisoners. Led by another shaman—later identified as Grashork, the commander of the Ghauwffhwar siege—these gnolls transported away via a powerful magical scroll, taking their captives with them. The settlers were forced to burn what remains they could, but were lucky enough to salvage significant resources from the Mulhorandi caravan.

Over a month later, representatives from the Mulhorandi trading house of the Adio family came looking for their missing caravan, and, upon discovering what happened from the Freeholders, their leader Bakari generously allowed the village to keep the salvaged goods for their part in the battle, carrying some small word of Freehold's good name with them (this being the new moniker adopted by the frontiersmen for their burgeoning hamlet after repelling the raid). Strangely, Kehur vanished mysteriously the night before Bakari and his entourage arrived, and has yet to be located.