Penders said they could use his characters as long as they reinstated how he intended them to be used! Here's how things could have worked out if the greedy, stubborn, and idiotic people involved in this lawsuit had just thought about the fans!
All they'd would have had to do was have the future change, again, so that in King Sonic's & Lara-Su's time it would be something of an amalgam between the unaltered timeline and altered timeline.
Shard I think that's kinda evident. Either he's repaired or gets put into a virtual system like Nicole until a new body can be made.
Knuckles becomes Chaos Knuckles/Enerjack again to bring back his people. Or he has the old Tasmanian Devil that he encountered in Albion to convince Thrash to bring back the Echidna's he banished. Afterwards Knuckles could fix the damage his ancestors did to Thrash's species, the Tasmanian Devil's, or have the Echidna race undo what their ancestors did.
Ixis Naugus last I had seen possessed Geoffrey St. John. Going through the motions of deception and being found out I feel that Naugus would end up destroyed while leaving St. John with some sort of reminder of all that had happened.
Hershey the Cat/St. John I doubt is actually dead. She's most likely in hiding somewhere, maybe even with a child or children. There's a reason for her disappearing from the battle field, she found out she was pregnant and left to keep the child/children safe.
Mecha Sally get's blasted by Naugus's crystal magic but she doesn't get destroyed, and her being crystalized when she attacks "St. John" would help reveal him to be Naugus, after which in a desperate ploy Sonic or one of the others makes a deal with Mammoth Mogul to undo Naugus's crystal magic and thus returning Sally to normal like how Bunny was. And before anyone tries to say that's not possible it should be noted that
Bunnie had forgone her Robian parts to upgrade to stronger cybernetics, so it is possible to change Sally back.
As for Robotnik, I feel that either he gets destroyed or made less of a threat, maybe even robotized again or reverted back to a robotic head by reality being shifted back to normal. Another possibility is that Robotnik somehow gets switched with Eggman, possibly with Silver & time travel, and thus unknown to everyone in the past Robotnik got destroyed in place of Eggman while Eggman is switched with Robotnik. That may actually stabilize the Prime Zone greatly. There are many options to dealing with Robotnik.
St. John reveals unto the citizens that Naugus had used a spell to amplify the citizens' emotions at Mina's concert, causing them to react strongly to Mina's musical message of suspicion against Nicole. That would thereby shame the citizen's and allow Nicole some freedom again.
Silver's time would be up in the air as either fixed or better off than it was, thus allow silver to form a new Freedom Fighters.
Did I not address a solution for a problem in the series? Please tell me if I did!