The covid part of the story is racy but not really anything to do with their business woes. Plenty of businesses took the same position and didn't collapse.
It's clear from the rest of the story that this is another business that didn't plan well, stumbled into success and made no real effort to try to professionalize the business to make it functional and sustainable.
I would be surprised if they can't find a buyer for the business unless the financials are completely toxic.