So, without getting into too many unnecessary details, a hairy situation recently arose between a friend/client of mine regarding a business trip I funded him for this Summer. Basically what I do is invest in people with proven track records to take my money and invest it in short-term high-risk/high-reward business ventures across the country where/when I feel it's worthwhile. There's a lot more to it, but that's what's pertinent to this issue specifically. I only have a handful of well-trusted people who I do this with, all of which I consider friends above employees/clients. We all have significant experience and success in this kind of work, but recently I've decided to take on the role of funding their efforts, of which they receive x% commission on their personal profitability. A ty situation came up with one of my employee's maiden mission, which consisted of 4 weeks being spent 2500miles from home, and I'm not sure how to resolve it. Everyone receives the same guidelines regarding traveling: That 1/2 the cost of all expenses incurred as 'travel expenses' shall be credited as a loss that needs to be overcome before any profit split takes place. Example: Joe takes a trip and accrues $950 in expenses. Joe profits $1500 while on said trip. $475 (1/2 of his expenses) are deducted from that $1500, leaving $1025 which will be divided between him and I based on our agreement. The reason for this is because they're not investing any $ of their own into the venture, but since they are expected to show a profit it helps me keep expense costs down while not giving them too insurmountable of a deficit to overcome. So I send Joe off to do his thing out West (Joe is a proven horse with a third of his life experience and results to boot) along with the agreement seen above. Since we've all been doing this for some years now, I simply spoke to him prior to the trip and said something to the effect of "Same deal, expenses are on the fund, 1/2 to be paid back before 'chopping'". Joe comes back a month later, and presents me with a detailed list of his expenses whilst away. Included are several lavish meals, a night on the town with a friend for his birthday in which he treated generously, a $250 limo ride (to a concert 1/3 of the price which I agreed to treat him to, the limo was his decision), and even a $120 trip to an Asian massage parlor, the details of which I didn't care to ask for. The net on the trip (which I'm not going to attribute to the good time he apparently had) was a loss....and so as predicated, I'm to eat the expenses. I tried to argue that a few of the obvious entries WERE NOT 'expenses' and that he should repay me for those, separate from our business agreement. He stands his ground that my offering to cover his expenses should include everything, even those I saw as exorbitant. My error was handling this newfound business idea a little too informally because I had worked with these people so much prior to taking it on, and not having a written binding contract with 'expense' clearly defined therein. Given the formality of our agreement (or lack thereof), do I have any legal leverage to wage in a situation like this? For this particular amount of $, I'm not going to pursue legal action either way, but if I can prove to him in some way that I'm in the right (and not just ethically), it would make me feel better and probably end in him reimbursing me. Until then, I hope it's a matter of him really thinking he's right here rather than taking advantage of some loophole I was too trustworthy too make sure I had covered. However it plays out, at least I got to see his true colors and learned to be more thorough with where my investments end up in the future. Thanks for reading and I appreciate any feedback, enjoy your weekends!