What should happen, is that the claimants should tally up the damages and if it is greater than cash on hand, Volkswagen should issue shares to make up the diff

What should happen, is that the claimants should tally up the damages and if it is greater than cash on hand, Volkswagen should issue shares to make up the difference. If that does not make up the difference, then the claimants should get a pro-rata portion of the company stock and all original share holders should lose their shares. The reason for this is simple: the idea of a corporation is to shield investors from personal liability - NOT - to shield them from loss due to fraud. What will actually happen is that the German government will meet with their trading partners around the world and pressure them into limiting the damage in order to protect German interests / pension funds.