For a company to start-up and move forward it MUST sell debt - period. That DEBT must be attractive to attract money from investors. Right now, WSTI has no attractive debt and no gross way (such as RS etc.) to make that debt attractive. Therefore, the scenario that you have posted is indeed necessary to "remove" debt (and not to cover it up or to paint it another color!) and it really does not require very much money to accomplish. IF, however, there is no market for the products capable of generating revenues, all that is moot. There is no other way for WSTI to come out of this mess without making a bigger mess of it! That is, the current debt has to be "dissolved" so that the remaining debt and the market make that debt attractive to investors, meaning that share value has the possibility to increase!
Whatever is happening that we see with the recent trading behavior is hopefully related to restructuring of debt. It is curious that it is happening at a time when the big Solar Companies ( e.g. FSLR, SPWR, SCTY, CSIQ, etc.) appear to be bottoming or at least turning upward, albeit ever so slightly. If that is the case, then the opportunity for "other money" to come in and buy up some of the existing debt and remove the toxic sink hole is beginning.
