Bingo.

Negotiating shows bad faith and the would-be purchaser gets the domain for free, almost instantly.

Negotiation is the absolute worst possible thing to do in a situation like this.

How much does filing a lawsuit cost, along with the associated attorneys fees? Probably a whole lot more than a few thousand dollars.

A UDRP or ACPA dispute costs nothing, or next to nothing. These are administrative provisions used to protect against domain squatting.

The so-called purchaser files a motion with the registrar, registrar reviews, and takes your domain. This is all before the courts get involved. No attorney fees or court costs required.

What's your advice? Take the $250 and ....

Telling them to piss off and launching a counter-pr-offensive seems like his best route.

Accepting a purchase offer also shows bad faith. Basically it shows that the domain owner just wants to make money selling the domain to an entity that owns the trademark.

[Edited: Best Course of Action? Talk to a Lawyer.]

Definitely, it's an absurdly low amount for an important domain name, but at the same time they could probably win it in court without much trouble, I'd think.

It would cost them thousands of dollars to win the domain in court. Which means he can probably get ... thousands of dollars from them instead of an insulting $250.

Maybe he should sell it on SitePoint? (the PR comes free!)