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We are a design firm. We told a client we would no longer do work for them. The company's requests for discounts and his need to make things a rush made the company a non profitable client. We resigned, saying we no longer wished to do projects for them.
They are now demanding we give them ALL of the working files on our computers that were used to create work for them. We never included the working files on our invoices (only the final product) and our understanding of industry practices are to charge a fee for them. We sent them our request and cost, and they got a lawyer who sent us a letter saying the files are theirs and we have no rights to them.