If Berge is unable to pay down those notes after the 1 for 10k R/S, (I believe he will not be able to), then BK may be the only alternative for him. Since he holds all the preferred, guess who ends up with the remains?
The casino store fiasco was an attempt to sell more shares, not sell more jewelry. Never forget this one fact because it transcends everything else; SKUM BUM berge is in business to sell shares, not jewelry. Once you understand that, every decision he has ever made will make sense.