It's very common when one-man band type companies or companies with one sole front guy start going under, for the shutters to come down and communication cease.
Often the guy running the company will juggle funds, trying to repay some people, using funds from some to satisfy others, desperately trying to keep things on the road until something turns up to save the day (often quite a specific something, but rarely something that is actually certain to happen).
By the time the company fails, the individual is frequently embarassed and ashamed, unable to face up to the people whose money they took (in good, if ill judged, faith typically) and unable of course to meet the financial demands that have been racking up the whole time. Frequently they will have been in denial about what is happening for some time, and simply cannot face up to the reality of the situation. Often they are in such a state of funk they just don't know what to do and ordinary good judgement gets wholly suspended.
Eventually the company fails with bad feelings all round.
It's quite a recognisable cycle, and I fear is what is happening here. I don't really understand the emotions that drive someone into that cycle, I'm not sure one can without experiencing it, but it's often actually quite good people who get themselves into this particular mess as it's the attempt to keep faith with customers which actually makes things worse. Bastards just walk away at an earlier point, so ironically doing less overall harm to their customers.
None of this is a defence, and may not be happening, but it's what it sounds like to me.
