After thinking about it all night and this morning, I decided to pull the eject handle. Yep, I took a bath on this. But the more I thought about it, the more I became concerned that the timing of the massive consultant fees and the lawsuit were not coincidental. I can't avoid the suspicion that they may have looted the company ahead of the judgment. This would be consistent with them not bothering to put a defense. They must have felt they were trapped and executed plan B via the consulting fees.
I'm out now, but I'll buy back in when they offer an explanation for the chain of events that took place over the last two months. The fact they hid the lawsuit from investors for as long as they did will leave me very suspicious of them from now on.