graeme_p - 5:26 am on Sep 23, 2013 (gmt 0)
Your attorney will give you the best advice, but:
1) Specifically ask him if anything they have done may constitute a criminal offence. Where there is deceit its worth checking. A fake DMCA notice, for example, is perjury.
2) If it does go to court, if you can prove that their behaviour was deceitful, the judge will probably be favourable towards you when deciding damages. The lengths they have gone to are also evidence that they themselves expected to do real harm to your sites rankings, so its going to be very hard for them to argue for low damages.