[fock]

But couldn't they just settle with the original lenders without buying back the stock from the actual holders? Or is that forbidden? To me this would seem a logical decision for any lender (the business was not dead, so selling was a little bit too risky, but now taking a 100% profit and being done with that instead of having a stupidly inflated stock and 10% profits in the, seems reasonable)

[trident5000]

The only way you can settle is to buy back the stock. You borrowed the shares from someone who lent them to you and now you need to return them.

[fock]

yes, but this someone probably would like to turn a profit as well and not be sitting on a pennystock?