C2 may try to continue but it will be a clear violation of NCAA rules ". Local Sports Clubs a. Coaches and institutional staff member in sports other than basketball may be involved in any capacity (e.g. as a participant, administrator or in instructional or coaching activities) in the same sport for a local sports club or organization located in the institution’s home community, provided all prospective student-athletes participating in said activities are legal residents of the area (within a 50-mile radius of the institution)"
YES, she is aware of the rule. They are taking steps to comply with the rule.
I predict C2 will fold or be sold for a token amount