Collapse of the Empire Eighty-Eight is an event taking place during Coil's Takeover. It focuses on Coil releasing the identities of the Empire Eighty-Eight to the public and the subsequent actions the Empire takes.
Because of their work here the undersiders are taken into their employers confidence.
This events combined with the previous unrest is what draws Leviathan to Brockton Bay.
With the death of Kaiser during the Battle against Leviathan, Empire 88 irrevocably shattered, having already been drifting apart due to these events.Coil makes sure that the group has a full schism.
↑E88 inevitably breaks into factions. The cracks formed when Coil outed them, and even without Leviathan to be the hammer, the wedge is in place for Coil to drive in. - Speculation by Wildbow on Reddit
↑“Captains, with me. Empire Eighty-Eight is divided, and I’m going to direct you on a series of strikes to ensure we deal as much damage as possible before the two factions can merge once more.” - Excerpt from Interlude 8.z