Furious that you have gotten rid of his arm, Lars kills you with a full-out assault that you feel scared by. Bors calls no hold and you are taken out by a hit to the chest because you feared the crazy barrage of swings Lars just performed.
As the penguins go away, you feel good that it took such a dishonorable tactic to kill you. He couldn't take you out otherwise, so be proud of this loss!