My grandpa got ripped....what should he do?

Okay, this is a really long story. Basically about a year ago my grandpa retired and decided that he wanted to start selling used cars. He would buy a couple and set them on a used car lot, owned by another dealer, and the guy would sell his cars for him for a couple hundred bucks a pop. That went on for awhile, and then this dealer got pretty hard up. My grandpa is such a good guy, he started stocking his entire lot for him, and splitting the profits so the guy could get back on his feet. The dealer told my grandpa that he considered him a silent partner in the dealership, allowed him to buy and sell cars under the dealership's name, even drive on his dealer tags. That was all fine until a few months ago when the dealer quit paying my grandpa his money, no profit, and no money for the cars that that my grandpa had paid for out of his own account. My grandpa was a little upset, so he started holding the titles, in the dealership's name, and the dealer would sell the cars anyway and pocket all the money. Eventually about a month ago I talked him into pulling all of the cars he had bought off of this dealer's lot and my grandpa started his own dealership. When we went to get the cars, the guy let us take most of them, except a few which we were going to get at a later time. As far as the titles go for the cars he had already sold, my grandpa told him that he could have them when my grandpa got his money, about $25,000. Now the guy has filed for lost titles, threatening to press charges against my grandpa for selling the cars that we got in the dealership's name, and for grand theft auto. My grandpa is actually considering just giving this guy all of the cars and going about his business, which I think is crazy. He doesn't want to go through the trouble of hiring a lawyer if he doesn't have a case, which is why I'm here. They didn't ever really get much in writing as far as an agreement or contract goes, but my grandpa has bank statements and receipts from all of the auctions where he bought the cars. So, what should he do?

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Oral agreements are binding and those documents and past actions can also help prove what was really intended. He should claim what is his!