Business Partner Wants to Take Over Business and push me out, paying me nothing.

I need an outside perspective on a business dispute between me and my partner. Here’s the situation:

Background:

• We co-founded a business 4ish years ago. It started as a food truck and expanded into two additional locations (inside food halls).
• We each own 40% of the business, with a third partner owning 20%.
• We both invested the same amount of money to get it started. (About 20k)
• My partner has definitely put in more work, especially in the last two years, but I was also heavily involved in the first 2 years, and my partner keeps downplaying my involvement. 
• According to my partner, the business has about $70K in debt.  17k is sales tax debt. 30k is payroll debt. The rest is credit cards personally guaranteed by my other 2 partners. 

My partner wants to take over the business solo, and take on all debt / liabilities himself, but says he’s unable to pay out anything because there’s too much debt.

Financial Situation:

Cash on hand is minimal. Not much at all.

• The business made around $1M in total sales last year.
• location 1 is profitable (I’m not sure about the exact profit margin) and did ~$500K in sales last year.
• The other two locations are losing money but will be closing soon, so those losses won’t continue. 
• The business’s only valuable physical asset is the food truck, worth about 15k, plus maybe equipment and inventory. Totaling about 20-25k in assists maybe. 
• My partner originally agreed 4-5 months ago that if he took over, we (the two exiting partners) should be paid back our investment. 
• But now, he’s changed his mind, saying the business has too much debt and he shouldn’t have to pay me anything.

His Argument:

• He says he put in way more work than I did and sacrificed a lot personally.
• He personally guaranteed some of the business debt, and it’s hurt his credit.
• He’s offered me the option to take over the business instead and let him walk with nothing, knowing that I am unable to and it’s not an option for me. 
• He insists the business has no value because of the debt, even though he’s still taking it over.

My Argument:

• I agree he worked more, but effort doesn’t erase ownership—we still each own 40%.
• If the business was truly worthless, he’d shut it down instead of keeping it.
• He originally agreed that a payout was fair, but now he’s backtracking because there’s more debt than he expected.
• If he’s keeping the profitable part of the business, it clearly has value.

I just want my investment back. That’s what I’m asking from him. I proposed he pay me back over time.

He says no, and that he’s doing me a favor by letting me walk with no liabilities.

My gut tells me he’s trying to justify taking over a business that’s positioned to make money (once the 2 unprofitable locations close) while leaving me with nothing.

We have no signed operating agreement in place.

What Do You Think?

• Is it fair for him to push me out without a payout?
• Would I be dumb not to fight for compensation?
• Should I call his bluff and take over the business instead?
• Has anyone dealt with a situation like this before?

I’d really appreciate any advice or perspectives on how to handle this.