I think that there is a disconnect in the OP's situation. If I am understanding the description correctly, only the Orc Slaves are in contact with the Chaos Knights, and therefore are the only ones being forced to retreat.The Chaos Dwarves are simply making way for them, not retreating, so they will not necessarily be required to lose stands.
As I see it, there are two possibilities at this point, and the original post does not specify the difference. If the Orc Slaves lost at least one stand, then at least one of the Chaos Dwarf stands would not be forced to make way, and the others would reform around that one.
If they did not lose a stand (bad luck for the chaos knights!) then all three stands of Chaos Dwarves would be forced to make way, one stand would move the shortest distance to be clear (2 cm directly away from the Orc slaves, or the front stand could move 2 cm forward, or the back stand could move 2 cm backwards.), then the rest of the unit would reform around that one.
In either option, the player can choose to reposition around the Wolf Riders, and does not need to destroy stands of Chaos Dwarves.
Ref: Pg 15, Rules Update: Making Way; also see the diagram on page 57 of the rulebook (not sure about living rulebook pages, going from downloadable .pdf files from GW site...)