The Shadow Schism encapsulates the formation of House Thuranni. When Elar Thuranni d'Phiarlan of the Thuranni family within House Phiarlan discovered that Tolar Paelion d'Phiarlan of the Paelion family was plotting on murdering the heads of the Five Nations during the Last War, Elar struck fast and murdered the entire family. When the Thuranni family was banished from House Phiarlan for their supposed treachery, they struck out to form House Thuranni.
In 972 YK, Knight Superior Kadrath ir'Vardikk of the Order of the Emerald Claw, at the time working as agents of Karrnath, approached Viceroy Elar Thuranni d'Phiarlan. Sir Kadrath revealed that the Paelion family was working in conjunction with Breland, and that they were behind an assassination plot against the child king Kaius ir'Wynarn III and his regent, Moranna ir'Wynarn. Sir Kadrath wanted Viceroy Elar to eliminate the Paelions involved before they could strike.
While Elar was hesitant to target his own family, he sought out corroborating evidence. Elar approached an independent agent with connections in Karrnath: Gaven d'Lyrandar of House Lyrandar. What information Gaven uncovered, though, shocked Elar. Tolar Paelion d'Phiarlan, the head of the Paelion bloodline, not only had a plan to assassinate the king of Karrnath, but was planning on assassinating the rulers of all Five Nations, and consolidating power under Paelion. These plans included the assassination of the other four major families within House Phiarlan.Elar decided he needed to strike fast. He took the best assassins within the Thuranni family, and they struck quickly. Elar himself killed Tolar, and his family killed every Paelion member they could find in the main House Phiarlan enclave in Regalport. Across Khorvaire, other Thuranni stuck as well, bringing an end to the Paelion line. This became known as the Shadow Schism.
Outraged at the betrayal within House Phiarlan, Baron Elvinor declared Elar and his family excoriated. Elar, though, did not accept her punishment. Instead, Elar declared the Thuranni bloodline its own house: House Thuranni. Naming himself Baron Elar d'Thuranni, Elar took the contracts that both the Thuranni line and the Paelion line possessed before the schism. 
While this is the public story of the formation of Elar's House Thuranni, there are many that question these events. Some believe that the Order of the Emerald Claw fabricated all of the evidence; some that the Shadow Schism was the result of secret agents of the Chamber; and others believe that Viceroy Elar and Baron Elvinor agreed to the split and decided to make Paelion the common enemy. The true hidden reason of the Shadow Schism, though, was none of these. In fact, the Shadow Schism was the creation of the dragon Shakravar, who had merged with the body of Gaven d'Lyrandar. Shakravar planted the information for his own motivation: Shakravar followed the Draconic Prophecy, and sought to fulfill a part of the Prophecy as the "Storm Dragon." However, before that, a piece of the prophecy needed to be fulfilled: "The cauldron of the thirteen dragons boils until one of the five beasts fighting over a single bone becomes a thing of desolation." Shakravar believed that the thirteen dragons were thirteen dragonmarked houses, and that the twelve current houses needed to become thirteen. To do that, Shakravar must create a thirteenth house, which he did by manipulating Elar.
In the end, Gaven was discivered to have been behind the betrayal. However, at this point Gave's true personality began fighting against the personality of Shakravar, and Gaven began going mad. Gaven was captured by House Lyrandar, and excoriated from the house. However, Gaven was the only member of House Lyrandar with a Siberys Mark of Storm. Instead of putting him to the blade, Gsven was sentenced to a lifetime to Dreadhold, the inescapable prison run by House Kundarak.
- ↑ 1.0 1.1 1.2 Dragonmarked. Keith Baker, Ari Marmell, Michelle Lyons and C.A. Suleiman (2006). Wizards of the Coast. ISBN 0-7869-3933-8.
- ↑ 2.0 2.1 Dragon War. James Wyatt (2010). Wizards of the Coast. ISBN 0-7869-5482-5.
- ↑ 3.0 3.1 The Forge of War. James Wyatt, Wolfgang Baur, Ari Marmell (2007). Wizards of the Coast. ISBN 0-7869-4153-7.
- ↑ 4.0 4.1 Storm Dragon. James Wyatt (2007). Wizards of the Coast. ISBN 0-7869-4710-1.