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Shhuusshuru, the dracolich leader of a newly formed Cult of the Dragon cell in Berdusk, wished for Greshrukk to be the next dracolich they created. The vessel chosen to bear his spirit was the ruby in this sword. Unfortunately for them, Harper agents attacked the ceremony, and Red Eye was slain at the culmination of the ceremony, just as he had become a dracolich. It was believed his spirit survived in the ruby, but the sword disappeared during the ensuring conflagration. Harpers and Cultists alike sought it out.
In fact, one of the Harper agents stole the sword. Eventually the Harper was tracked and slain but the sword was lost. Both the Cult of the Dragon and the Harpers desperately searched for the missing sword until it turned up in the hands of some adventurers. Cult agents managed to get the adventurers to travel to Greshrukk's lair, where Shhuusshuru and her cultists ambushed them.