Good points by Bob, Iron and Jeff.  In case you haven't walked away yet, let me share with you my thoughts the last couple of times when I was in a similar situation.

In general terms, shareholders do NOT make corporate decisions.  The Board does - though the shareholders very much have say in the Board election. 

Thus, in regards to "In any case, this is a decision that the 2 warriors need to decide on, not you," the warriors have to fight it out at the Board level, not as shareholders.  I would suggest viable options to the Board.  The Board had to decide.

So, who are on the Board in your case?  (In on of my last cases, one Board member quit the Board and created a 2 vs 1 situation on the Board.  As the saying goes, the rest is history.)  If they're 50/50 on the board, the divorce proceedings may have to step in.

What did the Board decide regarding the $50K? 

Do you have copies of the Board resolution or minutes when you book the entries?   

I would continue on only if I could go strictly by the book.  Meanwhile, I'd make sure my E&O policy is solid.

(I was also in a case whereby two groups declared they were the legitimate Board.  I ran to the hills that one time, even though one group was headed by a longtime client.  The litigation lasted for over 2 years.  I used Jeff's rule in that case but kept it at ONE awaken night at 12:30 am.)  

The above is along the the practical side of Bob's point: Your client is the corporation.  Hope it helps.