The Sheena Island incident (tentative) was a biological outbreak that occurred on the isolated European island in November 1998.
Umbrella operated a Tyrant mass-production plant on its planned community island. Under the oversight of Island Commander Vincent Goldman, new advances were made in the collection of β Hetero Nonserotonin, a hormone essential for production of the B.O.W.s. Since the hormone is secreted in response to fear and agitation, Goldman had researchers perform unethical acts on abducted subjects; their heads were cut open and the hormones collected while they were fully conscious to maximize fear. When the other subjects began to suspect they were being killed, they tried to break out; they failed, and Goldman personally executed all twenty of them.
Knowing Umbrella would not act kindly to his acts of brutality, Goldman tried to cover this up by having the prison warden write a false report about how they all committed mass suicide. Rumours spread to the town, and residents began their own investigation of Goldman to get him removed by Umbrella headquarters. Goldman was informed of the arrival of a spy on the island posing as himself; the agent, Ark Thompson, was assumed by him to have been sent by Umbrella.
Two weeks later, Goldman uncovered news of the completed investigation. To prevent Umbrella from eliminating him and to demonstrate his power over the island, he came up with horrible machination to punish them. His plan was to escape when Under Taker units arrived to destroy evidence of the outbreak, including murdering survivors. Once he had escaped, he would reap the profit by claiming it was an accident.
On November 22, Commander Vincent Goldman deliberately spread the t-Virus over the entire island (making sure it appeared to be an accident). He then attempted to hunt down Ark Thompson to finish the job and then return to Umbrella headquarters to collect his earnings; and when Ark was attempting to escape Sheena Island via helicopter, Vincent tracked him and shot it down. Ark lost his memory after the fall and wandered aimlessly (though not unconsciously) through the t-Virus infected city. Vincent lost consciousness when the helicopter crashed, but survived. Somehow he got back at the local Umbrella facility to call Umbrella HQ for rescue. But Umbrella, after getting the disturbing news of the outbreak, sent a squad of special clean-up forces to eliminate any survivor with knowledge of the Tyrant production instead. These Umbrella Trashsweepers (colloquially known as "Cleaners") were ordered to recover the Tyrant data and to eliminate the possible perpetrators of the outbreak.
Meanwhile, Ark Thompson began to uncover some of Sheena Island's secrets as he ventured through the city. He visited certain areas that contained classified Umbrella data. Ark managed to reach the Umbrella research facility. There, Vincent Goldman released several mass-produced Tyrants to dispose of Thompson. He also found the now orphaned Lott Klein, a boy which was the son of an Umbrella employee in the island. He later recovered his memory and confronted Vincent in the research facility. During this, a prototype Tyrant (Hypnos-T Type) escaped from its container and killed Vincent in front of Ark Thompson. He survived the Tyrant onslaught and escaped the facility through a train which got Ark and Lott to a small airfield. There Ark found a helicopter and used it to escape the island with Lott & Lily (Lott's sister) Klein at his side. However, the earlier Tyrant reached the helicopter in a more mutated form. Ark managed to fire two stored missiles to the mutated Tyrant and launch it out of the plane. He then used a second stored missile to blow up the Tyrant in mid air. Ark Thompson and the Kleins escaped to safety.
Sheena Island was destroyed on November 26, when the self-destruct sequence was activated.
During the t-Virus outbreak Sheena Island was populated by infected residents of the city and the Umbrella facilities including the Tyrant Plant. Lickers were also produced in the outbreak. Some Hunters that were being housed in the Umbrella facility were released by Goldman to dispose of Ark Thompson.