Be sure and take screen shots of everything now..As suggested this is a legal and needs to started, but before they can change anything get the screen shots now.
Print them off make sure the shots are dated send this company a copy of them and that all this is being turned over to a legal team. Demand the site be removed and expect futher communications with your legal team.
Be sure and take screen shots of serp positions so you can show how this has harmed your company. Get it all documated now.