Involving the police could end up being a very costly decision if he also committed a crime. That's why he really needs to see a lawyer before he talks to this guy again or makes any more public statements about what happened. (The comments he made here admitting to threatening the non-payer's business interests can be connected to his real identity through all the information in his profile. All you'd need is a subpoena for domain registration or ISP records.)

A lawyer, if given all the above information, would be able to tell him whether it would be better for him to fight or just walk away (and also give him advice on how to better handle this kind of situation in the future).