PBGC coverage failure remediation

Hypothetical situation:

Cash Balance Plan terminated and paid out 2 years ago, final 5500 was filed.  Plan was never filed with the PBGC due to qualifying exemption as a professional service firm.  You are requisitioned to assist with facilitating report and documentation exchange to a potential buyer in an acquisition of the (former) Plan Sponsor as your former colleague who handled this plan is no longer employed. You notice that the plan exceeded 25 active participants and probably should have been covered for the last 3 years.  In their very thorough due-diligence, appears the potential buyer has also noticed. 

What is the potential exposure here?  How would one go about even starting a corrective action. At minimum, I'm thinking comprehensive premium filings and payments for the years coverage is obligatory.  I also see ERISA 4071 states the max per-day penalty, which looks very significant, but also that they would not likely charge that in a case like this.  Would one go so far as to say this is a qualification failure with a need to seek IRS remediation? Any other considerations?

I don't see it as an IRS failure. But the PBGC could be very sticky or they could choose to be very helpful. 

That is if everyone got the proper payout the PBGC might "just" want the missed premium filings with penalties and interest, and a late Form 500 and 501 along with all the paperwork that goes with that.

Or they could say the termination is void and have you go back and do a lot which might also crate some IRS issues in addition to the PBGC ones.

It sounds like a good time to get ERISA counsel, especially one who works with PBGC issues, involved and review potential options.

I agree with Lou.  I also suggest that you reach out to the PBGC and ask them how to proceed.  I have found them to be generally responsive and very willing to work with you.