Wouldn't it be great if Steve could just step aside and "sell" the queue to someone for -5 percent? He's proven there's a market, and the product is viable as an engineering exercise. The only two problems, in my estimation, are
1. He priced the cars too low for what they are (when they are), and
2. He can't actually build them.
Two is related to 1., I think, but a really good mediator, plus the AG, could probably make something almost OK out of this.
Get the buyers in a room, have them come up with a figure. Some just want out. they get their deposits back with no interest—or some percentage of same, depending on what's possible. Some want a car, so negotiate a figure that's doable for that. They'll have to pay more than they contracted because, again, it is impossible to build these for what Lawing promised. Some guys will be OK with that.
Now this is the hard part: find a skilled mechanic and shop-runner, not a salesman, who can make the cars. Put him with that second group of people.
Lawing pays that guy some figure (probably in the mid 5s) to get him started, and in return the AG agrees not to prosecute him criminally.
Lawing agrees to pay the deposit-wanters some negotiated amount out of his personal assets. Not the business assets, since those are spoken for by the new guy and the remaining queue.
Lawing goes away. Files a Chapter 7, whatever. AG asks the federal judge to put a bulldog BK trustee on Lawing to prevent fraud.
AG works with new guy and TN Economic Development people to get some capital to the new guy on reasonable terms. Small beans. Like a million bucks.
New guy hires three young can-do dudes and builds cars and good will. Ends up with a viable business.
This is no easy thing, starting with finding the guy who wants the business and can actually do it. But there are many potential variants (deposit-wanters take a percentage ownership of the new business in lieu of cash, say) that could make for a deal.