Let's look at realities for a second here.
We know the organizer is broke. This is the reason why the promised prizes weren't paid, because he doesn't have the money, not because it was absconded with or hidden in a bag somewhere. All the funds collected from the event have already been spent, so the organizer is trying to pay his obligations a little at a time from his personal monthly income.
There are only four ways teams will get paid now.
1) Some "Angel" appears and offers to pay off, perhaps because they want to run a future contest at the same site. This is the most unlikely possibility.
2) The organizer finds a way to pay, in full or in part, possibly in installments over time. This is supposedly what he is trying to set up, but there is some resistance from those owed.
3) KCBS steps up and pays. Since there is no contract between the organizer and KCBS that obligates this, it would be essentially a gift from KCBS that will never be recovered, financed by our membership and sanctioning fees.
4) The owed teams bring a lawsuit against the organizer either individually or as a group in small claims court. Assuming a judgement is delivered against the organizer, collection of debt from someone with no money is problematic, so you're back to #2, plus the legal fees incurred.
Any discussed about how contest default is dealt with in the future is a moot point for the teams affected by this particular event.