Scenario: Final 8 players at a Texas Hold'em Bar Tournament Freeroll Event.
Players take turns dealing and play was resuming after a 10 minute break period.



Situation: UTG limps in to call $600. which was the current big blind.
The next 5 players fold.
The Dealer announces All in and pushes his $2700. stack across the bet line.
Small blind was not back from break and his hand was mucked.
Big blind folds.
Dealer did not notice live player in the hand and thought the hand was over. Small blind was still not back from break so current dealer announced he would deal again and placed his hand on top of the deck. This was seen by several players on the table and it was announced that UTG was still active in the hand and had not made a decision yet. The dealer removed his hand from the top of the deck to wait UTG decision.


Question: Is the dealers hand automatically dead when it is placed on top of the deck?
Is UTG then awarded the pot


Actual result at the table: The Tournament manager allowed the UTG to decide if the hand was dead. UTG said no and decided to fold. Dealer was awarded the pot. Tournament manager would have awarded the pot to UTG if he called the hand dead.

Intention of the dealer was clear to those present. His obvious mistake was also clear. Was the manager's decision correct?
What would you have done as the UTG? as the manager? as the dealer?
Is there anything in normal rules to cover this situation?