Meanwhile, the situation in Southern Italy had grown worse: After Henry's defeat at Naples, Tancred's brother-in-law Count Richard of Acerra had reconquered large parts of Apulia, and Tancred himself had reached the allowance of his claims by the pope.
Henry was granted free passage in Northern Italy, having forged an alliance with the Lombard communes.
In February 1194, Tancred of Lecce died, leaving as heir a young boy, William III, under the tutelage of his mother Sibylla of Acerra.
In May Emperor Henry, based on King Richard's ransom, again set out for Italy.
He reached Milan at Pentecost and occupied Naples in August.
He met little resistance and on 20 November 1194 entered Palermo capital of Kingdom of Sicily and was crowned king on 25 December.
On the next day his wife Constance, who had stayed back in Iesi, gave birth to his only son and heir Frederick II, the future emperor and king of Sicily and Jerusalem.

The young William and his mother Sibylla had fled to Caltabellotta Castle; he officially renounced the Sicilian kingdom in turn for the County of Lecce and the Principality of Capua.
A few days after Henry's coronation, however, the royal family and several Norman nobles were accused of a coup attempt and arrested.
Henry is said to have had William blinded and castrated, while many of his liensmen were burned alive.
Some, however, like the Siculo-Greek Eugene of Palermo, transitioned into the new Hohenstaufen government with ease.
William probably was deported to Altems (Hohenems) Castle in Swabia, where he died in captivity about 1198.
To take revenge of the capture of his wife Henry hanged Richard, Count of Acerra brother of Sibylla in 1196.

In March 1195 Henry held a Hoftag in Bari and appointed his wife Constance Sicilian queen regnant, though with Henry's liensman Conrad of Urslingen, elevated to a hereditary Duke of Spoleto, as Imperial vicar to secure the emperor's position in Southern Italy.
He placed further ministeriales in the Sicilian administration, like the Troia bishop Walter of Palearia who became chancellor.
His loyal henchman Markward von Annweiler was appointed a Duke of Ravenna, placing him in a highly strategic position to control the route to Sicily via the Italian Romagna region and the Apennines.
Henry's younger brother Philip of Swabia was vested with the large estates of late Margravine Matilda in Tuscany.
The emperor also felt strong enough to send home the Pisan and Genoese ships without giving their governments the promised concessions.
Meanwhile, the situation in Southern Italy had grown worse: After Henry's defeat at Naples, Tancred's brother-in-law Count Richard of Acerra had reconquered large parts of Apulia, and Tancred himself had reached the allowance of his claims by the pope. Henry was granted free passage in Northern Italy, having forged an alliance with the Lombard communes. In February 1194, Tancred of Lecce died, leaving as heir a young boy, William III, under the tutelage of his mother Sibylla of Acerra. In May Emperor Henry, based on King Richard's ransom, again set out for Italy. He reached Milan at Pentecost and occupied Naples in August. He met little resistance and on 20 November 1194 entered Palermo capital of Kingdom of Sicily and was crowned king on 25 December. On the next day his wife Constance, who had stayed back in Iesi, gave birth to his only son and heir Frederick II, the future emperor and king of Sicily and Jerusalem.
The young William and his mother Sibylla had fled to Caltabellotta Castle; he officially renounced the Sicilian kingdom in turn for the County of Lecce and the Principality of Capua. A few days after Henry's coronation, however, the royal family and several Norman nobles were accused of a coup attempt and arrested. Henry is said to have had William blinded and castrated, while many of his liensmen were burned alive. Some, however, like the Siculo-Greek Eugene of Palermo, transitioned into the new Hohenstaufen government with ease. William probably was deported to Altems (Hohenems) Castle in Swabia, where he died in captivity about 1198. To take revenge of the capture of his wife Henry hanged Richard, Count of Acerra brother of Sibylla in 1196.
In March 1195 Henry held a Hoftag in Bari and appointed his wife Constance Sicilian queen regnant, though with Henry's liensman Conrad of Urslingen, elevated to a hereditary Duke of Spoleto, as Imperial vicar to secure the emperor's position in Southern Italy. He placed further ministeriales in the Sicilian administration, like the Troia bishop Walter of Palearia who became chancellor. His loyal henchman Markward von Annweiler was appointed a Duke of Ravenna, placing him in a highly strategic position to control the route to Sicily via the Italian Romagna region and the Apennines. Henry's younger brother Philip of Swabia was vested with the large estates of late Margravine Matilda in Tuscany. The emperor also felt strong enough to send home the Pisan and Genoese ships without giving their governments the promised concessions.
Henry VI, Holy Roman Emperor