Alright, I need a pro to answer this question for me.
An argument ensued after a japanese amphibious assault was launched on US controlled midway island. US had a navy with carriers holding fighters, and land units on the island. The japanese navy wiped out the US navy and air units, with the exception of one US fighter and one japanese battleship with one hit on it remaining.
At this point, I explained that the Japanese battleship had to destroy the US fighter, clearing the sea zone, in order to continue to the next step of the amphibious assaut. My opponent, the Japanese, declared that the sea combat was successful because there were no defending warships, just a US fighter remaining. His battleship missed and my fighter hit the battleship.
Please clarify rules on this scenario, and furthermore what happens to the transports and their cargo?