Partnership gone bad
This problem is already being covered by a lawyer, but I want your experience and potential advice, comments, concerns...
A friend of mine found a great foreclosure. He paid $95k for it ($80k on a HML at 14%, the rest on CC- was 0% now blended at 11%)
A family friend/contractor agreed to do the work in exchange for profit- a 60/40 split (this was the best option since my friend didn't really have the funds to pay someone up front). Unfortunately, this man has a huge ego (since he was going to get profits and not a specific amount for his work, he insisted he be added to the deed), and in exchange for setting specific "rules" (ie true budget, time line...) my friend made a more lax contract in exchange for a signed quit claim deed. There was no set timeline (should have been a 6wk project, now 5 mo and counting); the budget was mentioned to be about $30k, but was not itemized and was subject to change...but if this man abandoned the project or otherwise caused harm to it, my friend was entitled to quit claim him off and finish the project himself.
So, of course, this guy slacks off and stops working all the time and starts being a "bleep." He also has started to go over budget. He refuses to buy my friend out at a proposterously low amount because he doesn't want financial responsibilty and has now stopped working and has gotten a lawyer. He is demanding full control of the property and a min $30k in profits before he starts working. He hasn't worked in over 8 weeks.
Obviously my friend can prove that he has abandoned the project and quit claim him off and finish the project himself... but he doesn't really have the money to (it will take everything he has), and he is worried this man will tie up the sale with a lawsuit.
What recourse does my friend have, if any? All he owes this man is money for the labor he provided in doing most of the rehab, but how can he get through this without donating his heart? He feels like this man, who hasn't spent a single penny, has full control. He feels like he has no control, yet full responsiblity for the bills until the house is sold.