I own the company at the moment i repeatedly request to form a u.s corporation with the money we got he was avoiding to do so bcuz he wanted to make sure we make 50-100K before we make any company which sounded fishy to me.
By the way: when replying, use the 'reply' link.
(I don't know the answers to those questions)
Additionally, an American investor can't be an individual investor in an Indian corporation.
If they really wanted to be on the "up-and-up", the American investor would have set up an American company, with the Indian company as a 50% investor. Then, the Indian company would sign a legal document assigning all copyrights to the American company.
Since nothing was on the up-and-up, and nothing was even signed (I hate email/telephone contracts), the American investor has very little leverage. Since he's threatening to sue, I would exploit it.