From the little I recall from HK in the cartel room, his problem is in liquidity, not negative equity, so we might be able to come to an agreement with him which is amicable for his depositors if he is unable to repay them within a reasonable amount of time (I have no idea if that's the case -- I'm speaking out of my ass a bit).
I'll admit that I don't know enough about the details to have much confidence in my conclusions. But I would just warn you that an equity problem often looks like a liquidity problem in the early stages.
For example, say you had people who borrowed money from you guys and then "invested" that money with Pirate planning to profit from the interest difference. Now that Pirate stopped making interest payments, they can't make interest payments either. This may appear to be a liquidity problem because your borrowers are either still hoping Pirate will pay back or just don't want to admit that they aren't going to pay back their loans. Once time, these non-paying loans will probably mostly fully default. If you make (or guarantee) loans to ease the liquidity problem, when those loans finally do fully default, there will probably be no money to pay you back.
A lot of people who thought they had little or no Pirate exposure may find out the truth is otherwise.