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IBM has sent a letter to Indiana Attorney General Greg Zoeller, demanding the return of more than $9 million in computers, printers, telephones and other equipment.

IBM and the state have sued each other over the the cancellation of a contract for the modernization of the state’s welfare delivery system.

Gov. Mitch Daniels canceled the state’s $1.37 billion contract last year following months of problems and complaints about the automated intake system.

IBM is not disputing the state’s right to cancel the contract, but is arguing in court that the state should pay for the equipment.

See Indy.com for the full story.