Correct in a way. It hasn't really been the place of any authority overseeing this to cancel equity, its function has been to orderly distribute whatever value is left, so you're right, it hasn't been an option.
Any sole proprietor can wind down a business any time he /she wants within the rules. Its not the place of a third party to say when it is no longer worthwhile to continue a company's existence, even if it has no more assets and a debt it can't pay - that is the domain of the company's officers, which work under the company's board, which works for its shareholders. Since there is no more board or officers, that hasn't happened yet. What has happened is another body simply has prevented it from trading anymore.
It looks like the next step is a state charter revocation, which may be another step here but it will not change your mind.
Now, on the 1:1 and Cash. Who is swapping and providing cash? If you can't answer, then I am not sure how you could think that is happening.
