COBRA coverage pursuant to asset sale

[Guest holmenbt]

In looking at the applicable COBRA Regs for business reorganizations (54.4980B-9), I cannot figure out how to handle the following situation:

Seller in an asset sale terminates health plan, and the majority of seller's employees will be terminated (a few will remain employed part time for "clean up" type operations). Buyer is not a successor employer, b/c there is a substantial change in the business operations after the sale. Thus, the buyer has no obligation make COBRA coverage available to the M&A qualified beneficiaries. Because the seller terminates its only plan, the seller also has no obligation to make COBRA coverage available.

So, we have M&A qualified beneficiaries and no entity with an obligation to cover them. Do these beneficiaries get a COBRA notice but no coverage? No notice of any kind?