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BlueBirdWD
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I don’t have a problem with my clients ‘owning’ the artwork after they have paid for it.

Sadly it seems you are damned if you do and damned if you don’t in this situation. You said they were going to pull the plug and start getting everything done internally anywayanyway, I would of just let it go so the relationship ended on a good note, unfortunately now it’s been soured.