It's always sad to see things like this... been there... done that... several times
I ran several businesses with family/friends or helped them with their business in difficult times... only to get fucked over in the end. I don't know the whole story here, so it's difficult to comment... all I can say is that I never give up and just can't lose faith in people... don't want to. I currently run two successful offline businesses with friends and I'm glad that I put the past behind me. Running a business with family/friends can be the best or worst thing.
However, sometimes I kind of envy a friend of mine. He's really loaded and gets approached by 'friends' all the time. He always does the same thing... he invites them for a nice dinner and then tells them that he won't give them any money or invest into their business because he likes the friendship they have. It really works well for him...