I thnk the law would say they belong to Killer, and even though the people who bought them did so without knowing they were stolen it's just tough, the records belonged to killer in the first place and they were sold after they had been stolen from him.
As I said though, it's tough on the people who paid for the records, they didn't know they were stolen and God knows money for records is hard enough to come by anyway. I suspect that the only way it will be resolved to every one's satisfaction is if the Police were involved, then at least a successful prosecution could include compensation for the records that were sold, so killer could either let the people keep the records, or buy them back from the people who had paid for them.
And yes, I live in the West Midlands, and know who stole them, and who sold the records on the theif's behalf without knowing they were stolen, and I know some of the people who bought them (And I wasn't one of them)
So I can see where Joe is going with the ethics question, and I don't have an answer. We all have our own feelings on what we might do if placed in this situation, but I can't tell other people what to do. It's up to their own conscience and finances.