Ken would have to notify any other registered parties that Ukyo owes money to about this sale of the assets, and would have to distribute any proceeds over and above what is owed to them.
We are in a grey area as you have indicated. Little in the BTC industry operates within the letter of the law as it is currently written.
The action Ken is taking is within the spirit of the law - that which is the underlying intention. That intention is that an individual or company can hold the assets of a debtor and sell them to recover their losses if the debtor does not or can not pay up. That is as far as you can go in this unregulated industry.
You are implying that Ukyo could take Ken to court but what legislation would
he use? The shares he will claim to own are not registered securities, the BTC he used to buy them is not a legally recognised currency, the exchange he set up was not registered etc etc. Do you see the problem? In other words if Ken can't do X because the legislation does not appply then Ukyo cannot do Y (bring him to court) because the legislation does not apply.
At the end of the day common sense needs to be applied in any Grey Area. So I would maintain that Ken is doing the right thing.