Great news!

[West]

We've tested the kill function.. Everything seems to work proporly.

[Scorpion]

Excellent. What happens to the empire belongings and potential public market goods?

...asking for a friend.

[windhound]

So there's an option to reset once killed (instead of having to make anew), it'll revert to new account settings and all troops/resources will be ~poofed~.   
Actually not positive about marketed goods -- they should just disappear, but again it's been a while.