Unfortunately, the fact remains that the business took the money and did not perform the work and this would be seen in any suit for defamation as the TRUTH which is an absolute defense. In order to have a case for defamation, it must be a known false statement (not someone's opinion based upon their interpretation of the facts). Here they paid money and got no work. In fact, it was admitted by you they received no work. When someone pays to have work done it is reasonable for them to expect that the money they paid will be used for THEIR WORK and not to pay other bills, so the excuse that it was just a bad economy would not hold with the court. I am sorry to tell you that any claim you would try to pursue against them would fail on this basis and would also lead to countersuits against you, if you have not already been sued, to recover the money that they paid you for work you never performed (regardless of your excuse).
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