[curtains]

I would inform the tournament director of what happened, and I would expect the director to forfeit the players on his or her own. I wouldn't cry for a forfeit, although I think it would be the expected result in any reputable tournament.
Imagine if every time you played a sit and go on partypoker, the 2 short stacks made a deal to split whatever prize money they win. It would change the strategy so drastically.