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I am sorry, but this is so convoluted and there is so much money is at stake that if you haven't hired a lawyer by now you are certifiably insane. A couple of things are for sure, you and your business partners were a) not equipped to detect/vet a loony b) were not able to handle them c) did an ask HN in a situation that obviously calls for a lawyer. I am sorry but you are seriously lacking business skills. After this is finished you need to either learn from your mistakes or better yet put out for, and vet very very carefully from multiple references and past performance, a serious business oriented partner because this rambling post with tens of thousands of dollars at stake just screams clueless.

I see your points but I think this is overly harsh. You aren't experiencing this first hand - you are reading a summation after the fact and making a quick judgement. This possibly is all happening like a slow motion car wreck.

There are a number of dynamics at play in a situation like this and it can get very confusing, very quickly. The new guy is both an investor whose money they are currently spending and also an employee which blurs the lines on how to manage a relationship like this.

I have seen these kinds of relationships blow up before and when you are a young and inexperienced entrepreneur you don't know whether to engage him, disengage and get attorneys involved or just go crazy. Sometimes it looks like the other guy is holding all the cards.

This doesn't scream clueless, it screams confused and not sure whether to spend scarce resources on attorneys. Next time they will have an attorney standing by.

No, look at the figures they are talking about, 400k and 185k; plus the other side has already been threatening legal action. Not taking definitive action by now, given how long this has been festering, and going to a web forum for advice is not simple confusion and is very well worth condemning. They came here for advice but they should function as a cautionary tale to all reading.

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