He runs a company, that is basically a sales company selling websites.
A customer places an order, he then outsources this order to a company who does the design and codes the template as well as provides the hosting. (there is no written contract in place between him and this company)
He then takes the coded template, fills in the content and provides it to the customer. The customer pays him, he takes his cut and pays the 3rd company for the work and the hosting.
Now, this 3rd party company has increased their hosting prices, and threatened to cut him off if he doesn't pay them. So, he has taken these websites, and hosted them himself rather than pay the extra. The 3rd party company is now threatening to sue him saying the code is theirs.
As you can see... as he has no contracts in writing, its a mess. There are loads of different aspects.
My perspective is the 3rd party has been paid for a functioning website, there is no contract in place to say the hosting HAS to be with them, as long as my mate does not re-ditribute the code or re-use the code on other websites he should be fine?
Also, by increasing the hosting costs it is effectively tortious interference as they can be damaging the relationship between him and his clients if they do not agree to the increased prices.