Yes it can and is being shorted and you are indeed correct that there is high risk shorting small illiquid companies as shorts don't get paid out until everything has been played through the courts.
It's my understanding (from a CFD dealer) that you would expect to wait between 12 and 18 months to be paid out on a short that goes belly up and you're gain is limited to 100%.
His suggestion is that real traders are going for much more than 100% gains when trading small caps and this would seem sensible to me.
I can't imagine that anyone other than Mt K would be holding shorts now as no matter how many shorts they hold they are hedged with the bonds and now the warrants.
The only thing that will make shorts close is profits
LYC Price at posting:
6.0¢ Sentiment: Buy Disclosure: Held
