This is a tough situation. Sounds like the three of you a real friends and that is probably how you got into this pickle. It's really tough to mix friendship and business but people do it every day. All that being said the three of you need to sit down and sort out what's been put up as collateral and what is fully owned by the guy going under. Sell what you can (everything has value, sometimes it's not much) figure out what the two standing guys can /are willing to leave the third then sell all the rest and walk away. Are you going to stay friends that is the real question and will play a big role in your decisions'. Myself I have helped guys(friends) that stole from me and will never get in a business relationship with them again but will be friendly. I have others that were just trying to sucker me and I won't even speak to anymore. It all depends on how you asses the situation.
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