Of course I'm not a legal expert but it seems like Twin Galaxies screwed the pooch wanting to prove that Billy was a cheat and a liar rather than just sticking to particulars of the case that was that Billy's verification for his records did not meet the new ownerships' standards for verification.

The record in question has video submitted by Billy. The tape shows that the game was recorded on MAME but that MAME is not allowed on that leaderboard. The evidence was a slam dunk in their favor.

Instead of just sticking to that, TG got emotional and claimed further impropriety between Billy and the former owner of TG, and between Billy and others. So much so that their lawyer compromised himself by spoiling the evidence and tampering with witnesses. All they needed to do is defend themselves and let Billy take himself down but instead they tried to bury Billy and ended up burying themselves instead.