Shorts can just hold their short LINE position. If the owners of the shares they are borrowing decide to tender, their short LINE position will automatically turn into a short LNCO position. This is the same as if you shorted a stock doing a cash tender offer - you'd have to pay cash for any tendered shares. Except in this case you'd have to pay in LNCO shares. Shorts might even benefit from an exchange as LNCO is trading at a discount to LINE, so they'd pocket the difference. But the exchange expires on 4/18 which is after the 4/14 grace period deadline so LINE will be bankrupt by then anyways making all of this moot.