>>60604427
Naked shorts create naked longs. If Shares have any value then shorts can never actually be closed. They defacto exist and no technicality can undo it.
Judge Papalia said shares cancellation can be fixed anyway. He said it just last month.

>>60527544
You see, the excess funds will be distributed based on the real number of shares issued by the company. If a broker is naked short he will be on the hook for those shortages. This will be passed on to those actually opened the short positions. If the broker chooses to internalize the losses themselves is beside the point.
Please see pic rel. It has actually never been addressed and shorts are actually deathly concerned about this exact scenario because they are locked into the trade and have no ability to hedge their exposure at this point. They are basically waiting for that early morning margin-call and a lot of short sellers will be liquidated this year once the lawsuits are all settled.
Shorts would be well advised to close their margin accounts and try to get their cash out of the market, and hidden in gold and silver. Because they will take your margin accounts when it happens, and if your losses are large enough their lawyers will come after you.
Shorts should be taking notes on all of these bankruptcy proceedings because you will be next.