hey guys, i thought id come here for help as im sure its full of people who will know the answer.

I did some work for a company (spec work)... yeah I know, never do spec work.. but they had a great rep with some other freelancers I know so I thought Id give it a go.

I did the work and needless to say they chose to hire me.

Great? well, at first. So I take on the project and recieve my deposit. The work gets done and they go quiet. A week later they owner messages me saying thanks for the work but its not what theyre looking for.

Fair enough i thought, they paid deposit and thats what its in place for. SO a day later I posted the heavily altered design up for sale to catch a bit of cash that I missed out on. Bare in mind the company name was totally removed and had no connections with them what so ever.

It sold in minutes and I took payment.. the next thing I get a phone call from the company, threatening me with "legal action" as the template was created for them and should not be sold because it has a lot of their 'intellectual properties' within it.

What the hell? Eventually, the phone went down. No contracts where signed and I expect I am well within my legal rights to sell the work they didnt want if its totally removed of their company name and all the rest. The design also looked nothing like the current site they have live.

What do I do? the template sold on to a respectable source, and now Im worried Im gonna get nailed. The client is in the USA and im the UK.