By this time, Sparta had built a fleet (with the help of the Persians) to challenge Athenian naval supremacy, and had found a brilliant military leader in Lysander, who seized the strategic initiative by occupying the Hellespont, the source of Athens' grain imports. Threatened with starvation, Athens sent its last remaining fleet to confront Lysander, who decisively defeated them at Aegospotami (405 BC). The loss of her fleet threatened Athens with bankruptcy. In 404 BC Athens sued for peace, and Sparta dictated a predictably stern settlement: Athens lost her city walls, her fleet, and all of her overseas possessions. Lysander abolished the Athenian democracy and appointed a council of thirty to govern Athens in its place.