"But, does this mean that that they don't receive K-1s or a 1099 for 2021?"

The old partners are no longer owners of the entity on the Sale date and afterwards.There is no K-1 for the people who sold. You might have a short year, though. You need to know the date of the sale.

You have to know why the payments are being made. Was the sale paid in full at that point of the sale? Is debt for the purchase? AR? It could even be Both events.

"They were thinking they were receiving 1099s,"

1099-What? You would never get a 1099-anything from your own entity. So, sure, they could be expecting a reporting form. But, reporting What?