Help! Getting sued by my own crazy brother!?

I started an in-house home tutoring company in 2002. In the summer of 2005, my brother became interested and wanted to help expand it into Connecticut. After only creating a mediocre website and doing barely anything as far as helping with the business, he lost interest in the company in a few months. In 2006, he sabotaged my company website because he had the pword. He wrote on the website that my company was shut down because of legal action. He now is suing me, saying he is entitled to half of the company and wants 60 thousand dollars to settle. My lawyer said it could cost up to 30 grand just to go to court and get defended. Nothing was ever signed between us and there was ever any contract saying we were partners. How can this be legal? Can I counter sue for sabotaging my website and trying to extort money from me? Should I try to settle or take it to court? Should it cost 30 grand? Thank you so much!