Form 5500 for a Terminated- Bankrupt Plan

[Nassau]

My client has gone into Bankruptcy and terminated its plan as of July 2009. The company itself has been liquidated according to bankruptcy procedures. All plan assets were liquidated by December 31, 2009. The company no longer exists. VG is in the process of completing the 2009 Form 5500 that will show plan assets are $0. Since the company had over 100 EEs at the beginning of 2009, and in order to file the Form 5500, they need to have an external audit performed.

Since the company is bankrupt and no longer exists, thus there are no assets in order to pay an external auditor, is the External Audit still a requirement? Is it a shortened audit or normal fullsize audit? Are there alternatives to a regular audit?? (FYI: they pre-paid for the Financial institution to complete Form 5500)

I am only aware of two possible options..........either the company disengage VG from the duty of the Form 5500 (and they just not file it) or they find a former officer of the company who is willing to pay "out of pocket" for the external audit.

Questions 1: Are there any other options that you are aware of?

Question 2: What are the ramifications if they don't file a 5500?

[PensionPro]

Here is a prior discussion: http://benefitslink.com/boards/index.php?showtopic=42680