TPK in Encounters?

[On Puget Sound]

No, we didn't quite have one, but it was very close, thanks to SIX consecutive failed saving throws (no further details, since we're playing a week ahead of schedule so it would be a spoiler for anyone playing on schedule). We had only one conscious and functioning party member, and had the dice not finally been kind (I roll in the open - no screen, so no fudging) the entire party would have been defeated.

Encounters offers no guidance as to what to do if a TPK happens, so I am curious. GMs, what would you do in this circumstance?

Here is what I decided I would do for next week, if everyone had taken a dirt nap:

[sblock=Spoiler!]
Everyone makes a new character for next week. At that session, they replay the same scenario as "the second group sent to find the first", but the defenders are monster versions of the first party, all charmed by the hag. They can be rescued by being first bloodied, then persuaded, as other charmed servants throughout the adventure have been. If successfully rescued, each player can choose to use either their new or their old character for the rest of the adventure.
[/sblock]

 

[Taed]

About a year and a half back (summer 2010), I had a TPK while DMing Encounters. I don't remember it too well, but I remember it was a room with torches along the walls and some sort of burrowing creatures that did some sort of nasty burst damage. (Anyone remember the details of that encounter?) There were 5 PCs with experienced players, so it wasn't as if the party was small and newbie. They went into the room and were immediately attacked, and must have lost initiative since 2 PCs were DEAD (dead dead, not unconscious) before they ever had an action in the first round. Since that would be absolutely no fun for the spirit of Encounters, we just all agreed to just make them unconscious, where they were soon revived by the cleric. However, the party as a whole soon succumbed to a TPK. As I recall, we then played the encounter again as a do-over, and since they knew what to expect, they all survived the second time around.

 

[the Jester]

Since the whole idea of encounters is a consequence-free, drop-new-pcs-in-at-need type of scenario (or at least it was when there was a local game store that ran it, until they dropped the ball) I'd just resume where we left off with new pcs.