Luckily you chose to be an LLC. You're only liable to the amount of money you invested. Unfortunately because your liabilities exceed your equity, when you liquidate all your assets -- you and him both get nothing.

You need to pay off as much of your debt as you can and tell them your business is no longer running. In turn, they have to write off the difference on their books, but will probably try to come after you personally. It may be an aggrevation but there is nothing you can do -- the venture failed. That's why small businesses are a high risk.

I suggest consulting with a lawyer.