[siegel]

The only concern here is that they likely have a partnership, legally, and each partner owes a fiduciary duty to the other. He can walk, for sure, but my guess is the co-founder will claim he was frozen out and, if OP is successful, will sue for breach of fiduciary duty (and other things).

[tptacek]

My bigger concern would be that he pivots, takes the code with on the pivot, finds success, and 6 years later when he's about to sell his cofounder returns claiming 50% of the proceeds are owed to him.

[siegel]

We're basically talking about the same thing. But, yes, you are 100% correct about the likely danger in trying to use the code in the future. That's why I think the cleanest thing to do (if at all possible), if he wants to make something of this, is to offer the guy a small equity stake in whatever entity is created to do this work and get a release.

I've been involved with lawsuits over the exact type of situation. Maybe the OP could win, but it will be a costly process...

[naivedeveloper]

Thanks for your (and everyone else who has commented here) advise. I think the approach I am going to take is to see if he's willing to sign an agreement to dissolve our partnership, giving me 100% of the company. If he really has just grown tired of it, as I suspect, I think he might do this. If he's not willing I'm going to try some type of buyout, payable once revenues can pay for it. Then I'll offer a small stake as a last resort. If he's unwilling to accept that then I guess I'll just have to quit the company. I really don't want to do that, I've spent so much time on this :( . But I'm also not willing to keep working on it without my fair share of the company; I'd rather start from scratch again on a different idea.