I've been through an "offer" before with another set of preferred shares. They can give you any type of offer they like and you can refuse to accept it and keep your shares. Generally the offer is to convert the preferred to common or common + cash. If 50% of the holders accept, then the float of preferreds is reduced by 50% and the short ratio will double. say the short ratio was 5% before it will be 10% after. It is an interesting question what happens if the post offer short ratio rises above 100%? -assuming there is an offer.
"Lets say management renegotiates the Preferred C and creates a new issue. What happens to the shorted shares of the C ?? Do they have to cover or do they just vanish?"
First, I'm not sure they can do that, but I do know the remaining shorts of which our local troll may be one, are really stuck right now.
In order to cover they have to purchase shares, but with the low volume, there just aren't any for them to purchase at any price. As we all know anything can happen, but if Novastar succeeds, and I certainly believe it will, the remaining shorts are in a WORLD of hurt.
i see the troll is back using one of many id's. He doesn't even realize that by using so many different id's to stress the very same points, he loses the possibility of having ANY CREDIBILITY whatsoever. Shows just how stupido he really is.