"They have since informed us that they converted their entity to a single person LLC"

You don't just "convert" a Corporation (C or S) to anything.  The Corp is liquidated with the distribution of the assets effectively being sold at fair market value - which quite often creates a taxable gain.

And was the Corp dissolved with the appropriate state authorities.

I agree with Bill - this client should likely be fired.  And I suggest getting a LARGE retainer up front, as this will be complicated to unwind. There will likely be tax consequences, which will probably p.o. the client.  Clients that are p.o.'d are often reluctant to pay.