Does a small businesses debt work into a buyout of a 50% partner of that business?

I am buying amy partner out of our business. He feels the $200,000 debt we hold should not work into the equation. We are trying to handle this without involving lawyers and valuation fees.

Yes, the $200,000 should be included in the valuation of the business. That debt impairs the value of the business assets. I'm sure your partner would love to walk away from the entire debt with a check in his pocket for half of the business' value without the debt.

If you agree to that, you are essentially agreeing that the business is worth $100,000 more that your partner thinks it's worth.

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