[Dueller]

With all due respect I have two words for you: Due Diligence. You didn't do it.

Fortunately you haven't poured any cash into the business out of your pocket.

Unfortunately you don't have a whole lot in return. 20% of an apparently non-profitable business. Even if you had ridden it out for 5 years you would have at best a non-controlling interest in a non-profitable business. You do/did have the warm fuzzies that you were a part "owner."

Just out of curiosity, was agreement with this "ownership" of the business just the business or did it include assets (such as land, buildings, equipment, tools) of the business? And how did it address liabilities of the business? Depending on the type of partnership, you could be on the hook for part or in some cases all of the partnership liabilities (perhaps with or without recourse)...that's probably a remote possibility but it may exist and may be his trump card in negotiating the value of your interest.

Sounds like you entered into this quagmire without spending a few bucks to have a CPA or attorney look at it...may come back to bite you. Can't tell you how many times I've been brought in after the fact to straighten out such friendly handshake deals.