Political situation at Work - how to respond?

[Earlybird]

Wise mumsnetters, I could use your advice on how to respond to something that has transpired at work.

Background: I am self-employed and work with a large organisation to present a product to a certain audience. Four years ago, the organisation assigned a product manager to coordinate/liase between me, the organisation and the audience.

About a year ago, the organisation was restructured and new management was brought in. New management has issues with my contact person/product manager, and has been gradually reassigning her clients. About a month ago, they told me they'd like to reassign my account to someone else, but I resisted (out of loyalty), and said I was happy/had no complaints.

This past Friday, I went in for a meeting and was pulled into a room by one of the senior executives and told my product manager was 'off the case' and my account had been reassigned (reasons given were cloudy, but know my product manager is considered 'old-fashioned' and 'difficult' by the new, young team). New team then made a blindingly good presentation about what they propose to do for my product in the next year and onward (much better than anything I've seen previously).

My issue: what do I say to the old product manager? She will be devastated, and I cannot simply ignore. We are friendly (having worked closely together), but have not socialised together.