Your analysis is good and, I think, has about a 75% chance of playing out. The only caveat I have is that the scenario you describe would certainly result in the termination of TSG (you assume Chapter 7 rather than Chapter 11). If there are any annoyed shareholders out there who want to make an issue of things, however, they could file suit against the fiduciary parties for breach of duty. And given the circumstances, such suits might be able to attach personal assets. So while there is probably an incentive to settle, there is also an incentive to hold out to the last possible minute.
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