Assuming, since the rule pages don't deal with "If you drop your character", that it acts the same as death...
-Anything assigned to someone else will become the property of the assignee.
-Facilities commanded and piloted by None or the dead character become NPC-owned.
So it's very clear that if we treat Pangborn's NPCification as death, then no facilities should have gone to the Market for his GE faction-mates to purchase (and in fact, they didn't...they were placed there manually)
If we assume that Pangborn's NPCificiation is *different* than death, than that means we assume that "Pangborn the NPC" still owns his assets...which would again mean that they would be "NPC-owned", not go to the Market (and in fact, they didn't...they were placed there manually)
Either way, we have facilities that should not have gone to the market under any rules...on the market, and not as the result of a bug. They were placed there manually by an administrator. Likely the administrator did not know the relevance of the Flats, so it was not purposely malicious on their part.
However, "somebody" told Kyle that "There's a bug, someone died and the facilities never went to the market." and he was a bit sloppy and forgot to actually check the rules to see if that *was* a bug....or perhaps a GE member trying to take advantage of him.
At the very least, the flats have to be made NPC-owned again.
To some degree, I would even say that if the flats gave the GE control to build five new cities or something (I don't know if they did), then their money should be refunded, and the cities removed. To a similar degree, I would say that there's a chance there's a certain GE member who should be OOC punished for this...but it's always possible it was an honest mistake on their part, and they assumed an admin would tell them if they were misinformed, so I'm hesitant for that as well.
But at the very least, the flats have to be made NPC-owned again, as well as any other facilities the administrator in question manually placed on the NPC market.