"We have no contracts or any paper signed whatsoever, despite I requesting them repeatedly - hence why I could release the source code at my will."
Either you do have a contract, he owes you money for the work and he owns the IP; or you don't have a contract, he doesn't owe you anything, he hasn't shafted you and you are libelling[1] him. Legally, you can't have it both ways. A contract can exist without there having been any signed paper.
[1] IANAL; maybe you need to have named him or make his name inferable to do that.
1) Independently of whether a contract exists, the developer owns the IP. By failing to pay at the agreed-upon time, (possibly even before that if you have a good lawyer) the entrepreneur is in material breach of any verbal contract that existed and in a material breach situation the developer has no obligation to "perform" (transfer the IP). The developer is of course entitled to a legal remedy, that does not mean he is obligated to seek one--he has apparently chosen the remedy of open-sourcing the software.
2) Absent an in-force contract (see #1), the status of the copyright falls to statute, which says that if no money changed hands (and sometimes even if money changed hands), the developer retains the copyright.
3) Defamation in the US requires the plaintiff to prove the defendant's "actual malice". If the developer is spouting a legal theory that he in fact believes to be true, a belief that would survive a preliminary hearing, he's not being malicious. Lawyers don't get defamation lawsuits for advocating a legal theory. He is probably wise not to name the entrepreneur to avoid a lawsuit, but that does not mean he would be by necessity a libeler.
Either you do have a contract, he owes you money for the work and he owns the IP; or you don't have a contract, he doesn't owe you anything, he hasn't shafted you and you are libelling[1] him. Legally, you can't have it both ways. A contract can exist without there having been any signed paper.
[1] IANAL; maybe you need to have named him or make his name inferable to do that.