I'd start with terminating Lee as I would be replacing Dorion.
I'd talk with Karlsson apologizing about the situation, telling him that I would be willing to give him the money he deserves, then do whatever it takes to make him happy in terms of where he goes and how much he expects. Meanwhile, I'd suspend Hoffman until further notice.
As for Hoffman, if found guilty in any way I'd have to bring personal matters into the conversation as they have unfortunately merged. If his girlfriend is no longer in the picture, then I'd trade him to the opposite conference as Karlsson based on his decision. If he refuses to break up with his girlfriend, then I'd try to find a suiter for him that he's willing to co-operate with, after a certain amount of time and no team wants him then I'd terminate his contract.
I would give up this years' first-round pick to Colorado.
My moves:
Erik Karlsson to Tampa, Vegas, or Washington. But right now I say he goes to Vegas for two firsts, two seconds, Nick Suzuki, Cody Eakin and Malcolm Subban.
After that decide where Hoffman goes, but I'll just say I traded him to the New Jersey Devils for a very complicated conditional pick.
I'd like to send Matt Duchene somewhere he could contend. We'll say he goes to Washington for Grubauer, Bowey and 1st 2018.
Big house cleaning on the organization as I would try and get that bad stench out of the dressing room as quickly as possible. But before making any moves I'd have a talk with all the players who played on the Senators this season and see what we could accomplish, but if we cannot move on, no matter who they are, they will be traded.
Free agency - No big moves would happen, just the typical moves and small contracts. I wouldn't buyout Gaborik.
Gradually hire more scouts.