I agree that the share price will go up. "Forgiving" the senior preferreds in this case is a result of retroactively revoking the NWS (since both companies have now passed the 10% moment), which is what most of the court case plaintiffs want.
The argument I was trying to refute says that retroactively revoking the NWS amounts to an instant recap in the amount of $187B. I believe even the ab initio revocation would still leave a large need for capital to satisfy any post-release capital requirements. That could very well happen through a series of equity raises. This possibility is important to me because it affects how I want to split my FnF investment between the commons and junior preferreds.
Forgiving the SPS would also mean that FnF can retain their earnings going forward, directly adding economic value to existing shares. That would drive the price way up.