We have had similar problems with one of our clients. Fortunately we had also had the hosting and just posted a page saying that the site was unavailable - no graphics no nothing.
Clearly legal positions differ from country to country, but if they haven't paid the bills they cannot expect the site to be there. Even if they have paid part of the fee - which is for the expertise as well as the design. My sympathies are with you on this as it is an unfortunate fact of life that many companies do not appreciate that fees are not just based on time, they are for experience and expertise. Just hang on, I would doubt that they can make it stick.
In our case they even had the audacity to have another print company ask our design partners for the logo for the stationery. Needless to say they were told in polite terms where to go.