From Wikipedia (http://en.wikipedia.org/wiki/Polytetrafluoroethylene):
"While PTFE itself is chemically inert and non-toxic, it begins to deteriorate after the temperature of cookware reaches about 500 °F (260 °C), and decompose above 660 °F (350 °C).[12] These degradation products can be lethal to birds, and can cause flu-like symptoms in humans.[13]"
Sounds like your friends scorched a pan and the breakdown chemical is really bad for birds.
...
"The United States Environmental Protection Agency's scientific advisory board found in 2005 that perfluorooctanoic acid (PFOA), a chemical compound used to make Teflon, is a "likely carcinogen." This finding was part of a draft report that has yet to be made final.[15] DuPont settled for $300 million in a 2004 lawsuit filed by residents near its manufacturing plant in Ohio and West Virginia based on groundwater pollution from this chemical. Currently this chemical is not regulated by the EPA."
I think 3M has also had problems with this chemical. Note that it is precursor chemical that is thought to be a carcinogen.