So maybe I'm just jaded and I've worked through enough bankruptcy filings in my life but the first thing that would come to mind is who exactly is going to do the auditing and hair cut?

Is it the exchange or is it a licensed bankruptcy trustee like www.pwc.com?

If things are above board then it almost by definition will be the later. If on the other hand its the exchange doing the haircut then you have to trust that they'll be honest about it....I mean with millions involved that's alot of trust.

I hope the exchanges assets are sold off first to help pay off the missing bitcoins because if the exchange is trying to force the loss onto its depositors and then keep running as a business then that's some really scummy behavior.

I'd assume the model would be Lehman brothers, force it into bankruptcy liquidate its assets, wipe out the owners so they don't benefit from their own mistakes and use the remaining funds to pay back creditors/depositors.