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The best method is to dissolve and liquidate the partnership.
Oral agreements to form a partnership are potentially enforceable. The requirements for a partnership are much lower than for a corporation or LLC. If you have breached the terms of the original "deal", make it right. However, you are obligated to honor nothing more than the actual "meeting of the minds" of the parties.
As for the new LLC that was formed legally after you severed ties with the liar, I don't have a lot of concern about him having any claim there. As for the potential partnership that was formed orally, the best defense is to gather as much evidence as possible as to why you terminated the relationship and presumably the parternship. If you can establish the lies and fraud, perhaps you can justify the decision to end the partnership or to refuse to start the partnership. If the liar contributed any assets to the partnership before it folded, make sure those assets are returned to the liar. The only other suggestion would be to make sure that you secure a decent local attorney in the event that a lawsuit is filed. If the business is now going well, you don't want to expose that success to any claim.
Best wishes and good luck.
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