Can you relist/re-activate a listing if buyer refuses to sign rel

[Andrew Johnson]

Buyer's loan has been denied after financing contingency has expired. Apparently they want to put up a fight about the EM. Their agent told me(listing agent) that if seller doesn't sign the release of EM to buyer, it will cost them a lot of time and headache while it goes to mediation/court and they can not relist the property until this is resolved. She said the closing attorney(who holds the EM told them that). Is that true?

(mods can you please change the title to Can you relist a property if buyer won't sign release of EM?)