The way I understand it ( but I could be wrong) any shares sold short remain so until more shares are purchased to cover those short positions. Unless the company (Hangover Joes) in this case files bankruptcy. Then whoever sold shares short no longer has to cover them.
The only way I know of for KBM to purchase shares now to cover those they sold short would be to purchase them in a private sale.
Some investors purchased those shares KBM sold short and paid for them. How can those shares become invalid if HJOE trades again? What happens to the investors who purchased those shares sold short if HJOE trades again?
Hangover Joe's Holding Corporation (HJOE) Stock Research Links