Then they have established a lower bound on the value of their shares.

Bingo! Now you know it’s BS. This really sucks. It’s not a good place to be. The fact that they won’t take a buyout from you means they are pulling a fast one and someone probably said “You know, it would look better if it was just you” somewhere down the road.

Don’t sell, don’t give, don’t walk away. Stand firm. This was a binding agreement they can’t get out of. You have all the power here. You know you have something. They have established a lower bounds on its value. It’s way more than 40% of 400k.

Best of all. Don’t let your customers know it’s founders are going through this. It’s obvious, but make sure you keep your cool and composure. It will pay off in the long run.

>> It will pay off in the long run.

For both of them if partner can separate head and ass.

Could one really re-establish trust at this point? How would you know things may not head south at any future point with a big outcome at stake?

How do you figure NTF can't get out of it? Couldn't they fire TCF with the investor's cooperation?

I was assuming there was some sort of binding articles of incorporation that guarantees the TCF rights in this case.

That's a negotiating position.

Then they are in lots of trouble, assuming the OP has a rock solid legal agreement...