[anorborg]

I think you should leave the business. You have made a decision which could irreparably harm it. If both you and the girlfriend truly care about the business, you'll both sign "i won't sue" resignations and do whatever your friend needs to help the transition.

There is no trust in the co-founder relationship now and you've made bad decisions for the company. I do no think you can successfully carry on especially if this is a small company.

As for your friendship, I can only wish you luck. I don't believe I could accept this kind of betrayal but everyone is different.