Hey there, man. I know things seem ridiculous right now due to what Collective Shout did, but I am starting to wonder what they did to cause this is legal or not. Now, I'm no lawyer, but maybe you should talk to a lawyer about this and explain what transpired, but don't leave ANYTHING out. Give them as much information that you can gather and ask if what has happened is legal or not.
I know it sounds crazy, but getting a third party involved might be a good idea in the long run.