This is not cool. Sorry to hear this.
First, dont necessarily trust the grapevine. It is rare for a program to shut down. If this is your program, go to the PD and find out first hand. Talk to your hospitals Designated Institution Official (DIO) if you have any concerns. Existing residents and incoming residents at that program (including those who advanced matched and are about to enter their prelim year somewhere else) need to be notified of the situation in writing.
But lets say for the sake of argument that the above scenario is true. Ill assume this is a 3 year advanced program. The program finishes out this academic year (all 12 days left) and the next, then theyre done. Next years PGY-4s will graduate without major issues. Granted, the environment in which they finish residency is toxic, but they still finish in good standing. For the starting PGY2s and 3s already in the program, they are essentially in scramble mode. They need to contact outside programs and notify them of the extenuating circumstances. Their current PD should assist them, and the institution is responsible to direct resources for placement of all affected residents. The tricky thing is whether or not outside programs will (or can) accommodate an extra resident.
If an agreement is reached with a new program, that PD should contact the RRC to request a one-time expansion of the class size to accommodate the new resident. Once a program receives an exemption from the RRC, the resident and PD should contact ABPMR to inquire about the policy on resident transfers. This is especially important when transferring between programs with different formats (e.g. one month rotations vs. 6 week rotations). Rotations may need to be restructured, which may be a big deal.
The above also applies to the new prelim interns who no longer have a PGY2 spot. However they are also allowed to re-enter the match (for advanced PGY2 spots) and try again. Additionally, I believe they would now be considered independent applicants, and can sign a contract outside the match without penalty.
Hope this helps.