I'm sure the shorts are hedged with calls. What does owning a put have to do with anything? It means you lose your investment as opposed to suicide when you're put in the street! Infinite losses ahead. Do you really think a J&J executive would come on board a sinking ship, I doubt it!
My point is that shorting this stock is insane. Small float, closely held and many levers to pull that can keep the company afloat. I've been in and out over the years and marvel at Eddie's financial engineering. He has a plan, he knows it's a dog retailer and that's why he has under invested in the stores. I know there are arguments over the value of the remaining assets but I assure you Eddie knows their value and I would not want to be short when the squeeze happens!