There's not much your buddy can do. If the distributor is incorporated, they can only be sued for the corporation's assets, which are probably nonexistent now, if they are (were) privately owned, then you can pursue the individuals, but even if you win the case, you will have to get their assets, which will have to be sold, and then finally you will get your ten cents on the dollar if you are lucky. Personally, I would bite the bullet, and move on, and spend the time being productive and staying positive, rather than trying to pursue these low-life scumbuckets. If your buddy is lucky enough to get their names, it will at least give him the opportunity to inform people about their unprofessional business practices to other possible victims.

Sorry to hear that a good honest business person got taken.