No doubt that (USA being what it is) lawsuits will be lauched.
However, to have been in the market for years (real ones, not pinksheet), I have seen a lot of them and I still wait to get $1 out of it.
The explanation I "suggested" earlier is not necessarely "illegal"
He had ownership, morgaged it for reasonnable business reasons and still have a right to buy it back whenever business gets better.
Quite a reasonnable line of defense.
But who knows ???