There is of course the TUPE / Non-TUPE argument.
The final outcome of contractual issues, I suspect, will boil down to whether or not this is viewed as TUPE or not.
Not going to get tied up in the why's and wherefore's as Im not a solicitor. However, all I know is it can make a significant difference.
That is all.
Good luck to all those affected. Its never a nice situation to be in.