As much as you would like to retain every client and continue to do their future events, there are some that you just have to completely dissolve the business relationship. Often, it may be due to your own faults and incorrect judgements, alternatively it can be that of your vendor's. Regardless, you are still responsible for the client maintenance and event outcome. With allowing sub-contracting vendors access to your clients, you can instill a non-compete, but there still needs to be an established level of trust with the exposure. That being said, what if your vendor decides to side-step loyalty and approach your client to obtain their business directly? Not only does that effect your partnership, how does that make you look to the client in your choices for partners? How do you now move forward with future events? What if your client decides not to use you and contacts your sub-contracted vendor directly?
Of course advise could not be given unless it has been experienced first hand. Unfortunately, I had an extensive working relationship with a designer crumble when he approached the client directly through an email solicitation that he sent to me in error. There was a wide array of emotions from disappointment to betrayal to even hurt. As much as business should not be personal, I have built my company's reputation on investing a true and dedicated interest in each production, therefore each vendor is hand picked and backed by our brand. So, when a situation like this occurs, it's extremely detrimental for all parties. Cutting ties and mitigating damages with the client is mandatory, but wrapping up the pending business can get complicated depending on the level of access given. Having a signed non-compete can be enforceable by law, but how to you justify the damages and future financial opportunities? How can you trust new partners?
Alternatively, what if a client calls a vendor directly? Do they take the business and hope it remains unknown, take the work and offer referral compensation or just turn it away completely? A trustworthy vendor will have an open conversation with you to discuss all the alternatives and come to a mutually agreed upon solution prior to moving forward. If this scenario occurs and open communication is prevalent, that can only strengthen the impact of the entire brand as a whole and ultimately increase your karmic attraction for future business.