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As Smaug flies into rage, erupting from the mountain in a fiery wrath and loosing his flame upon the land, and flies over to Lake-town, Percy managed to survive the devastation that Smaug caused. However, the Company's attempt to kill Smaug failed when the dragon awakened and believed that the people of Lake-town were responsible for aiding the Dwarves to kill him.
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However, when Thorin Oakenshield revealed himself to be Heir of Durin's Folk, Percy and the whole crowd cheered for the mountain-king's return. Later that night, Percy was among the citizens that gathered when Thorin and Company were arrested and brought to the Master of Lake-town and Alfrid. After Alfrid ordered them to stop dumping the fish, Percy then ordered the guards to raise the gate and allow Bard to sneak the Dwarves into his home. Percy watched as Alfrid orders Braga and the guards to to dump the fish in the lake before Bard threatened the counselor that the citizens would rebel against the Master if they heard that he was dumping fish in the lake as food was scarce. As Bard declared that he was tired and ready to go home to see his son and daughters (who were worried about him), Percy observed the papers, stamped them, and commented the same, but before he allowed him to pass, Alfrid Lickspittle, the Master's second-in-command, who is suspicious of Bard as he is not licensed to bring in shipments of fish from Mirkwood. In the year TA 2941, Percy checked Bard in as he re-entered the town on his barge with Bilbo Baggins, Thorin II Oakenshield and his company of Dwarves stowed away in wine barrels from the Woodland Realm hidden in fish. Portrayal in adaptations Peter Jackson's The Hobbit trilogy
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