Your scenario for liquidating the preferred "S" shares owned by Solaris, all of which Rooney disavows ownership of would result in penalizing the accredited investors who make up the hedge fund. Those shares gave them controlling interest in Positron for which they paid $3.6 million. At the time the civil action was commenced, the market cap was somewhere around $10-$12 million. Keep in mind also that these accredited investors have been aware of their full investment in Positron since March of 2009, long before the civil action which was filed in November, 2011. Other considerations are the lack of a private law suit, no account freeze or preliminary injunction, let alone, no receiver being named. The forced liquidation of these shares will harm the investors, contrary to the SEC's main mission of protecting shareholder value. This case is to hold Rooney and Solaris management (again Rooney) responsible for any disgorgement, interest, or civil penalties, not the investors of Solaris. Depending on the outcome, Rooney may no longer be able to control those shares, and how that will be resolved, I have no idea.
The series "H" convertible shares that Rooney holds mature at the end of December, 2013. There are 3 options available: conversion, POSC retuning the amount loaned, or extending the maturity date. In a very short time, we can delve into how those shares may be treated going forward. Until then, what I have found in one SEC ruling is that to accommodate an SEC action the convertibles were surrendered back to the issuing company and removed from the share count. The value of the convertibles was then counted towards the amount of disgorgement owed by the holder of those convertible preferred shares.
Wishing all here a happy and safe holiday season.
Robert
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