I am a bit sad that the poll itself only seems to contain the most drastic position anyone can take. For example, you can very well take away a lot of the personal wealth someone has attained without throwing him into the poorhouse. Or you can make someone repay for damages, without it being a lifelong sentence.
Athian would echo that the Valentine family should be removed from the local nobility, their lands and estate on the main island given to a good cause for the city (maybe open something public in there, a school, a museum, transform it into a theatre, a church or the 1st bank of the Sky Islands and royal treasury) or as a reward for the valiant defenders. The financial wealth of the city-branch of the Valentines should be used to right some of the wrongs they have caused, but family members should be able to retain a humble sum that will allow them a fresh start.
In order to alleviate the worries so many have in regards to their demonic nature and the powers that go along with it, Athian would point to a simple solution: How about demons that want to live in Lismore would have to swear allegiance to the ruler and his bloodline in a way that is similar to how a pact works among demons.