"The facts are as previously stated."

Okay; but, perspective helps. No one on the internet can see the paperwork or ask your client anything.

"The business is gone"

Apparently not; the entity got purchased, not shut down.

"and he is now an employee of a new company"

With no equity position or other carry-over value for that partnership position?

If he got nothing for something, that would be a bad investment. If he got something for something, and didn't pay off the debt, then he used it for other purposes.