I disagree with this take except the last sentence. Sounds like they just found out about this in April, there's no way you could have investigated and reacted that quickly. You would have had to disclose this "potential" story to your trading partners too, just out of decency.
It can be salvaged but timing is bad.
Dude, there were posters on this board that knew about this for months. How incompetent does our management have to be to just find out about it?