Here's the way i read it. (I'm not a laywer. I don't even play one on TV..)
I believe that's written by the judge, not counsel for either party. It sounds like when the Trustee started the case against Fife, this Magyari wasn't known about. As details were revealed, this Magyari showed up. Apparently, they were able to press their point that this middle man didn't know the games were 'contraband', and because of other cases, that pretty much rules out the ability to get the machines back. The judge also had the question of what the Trustees woudl DO with the unlicensed games, should they be returned.
IMHO, all these cases are prep work for the trustees, to try and line up what Kulek has for his Bankruptcy hearings. It's like a video game - these are side-quests, to help with the main quest with Kulek.
Other than Tim being a real dick (pardon, but.. not sorry.), the Judge believes that Tim wasn't in the wrong buying the machines.