Even if they had a valid reason, it shows a serious lack of judgement (arguably to the point of malice) terminating the business relationship before discussing

Even if they had a valid reason, it shows a serious lack of judgement (arguably to the point of malice) terminating the business relationship before discussing or even thinking over the matter of paying for services already rendered. The person terminated the business relationship based on anecdotal reports, and then is surprised when he catches wind of unfavorable rumors being spread about him? It's ironic that in the process of breaking up with the cofounder, this person essentially created the situation he was breaking up for.