I am sorry to hear about your personal predicament with your brother. Family things can sometimes get very heavy, simply because they are family things.
My sense is that business partneships are always treacherous affairs. One starts out with the best intentions, and more than often, discovers that the way of a business partneship is not the way of human relationships. Human relations can be modified, experimented with, mutually explored and generally be given wide scope for adaptation and reconcilliation.
With a business it is different. The business has its own reality. It is establsihed to make money in as honorable way as possible. In this it has its base-line. Naturally one would strive to maintain good personal relationships within the business environment, but the profit motive of the business determines its rules of operation. To compromise this is to compromise the foundadtion of the business venture.
So, as your case with your brother, when his approach to business became detrimental to the existence of the venture itself, you had two choices: see the business go down because of poor management decisions, or let go of the source of such poor decision making. You seem to have had no choice. Naturally such a decision would impact on the personal relationship, especially from the point of view of the one who feels himself wronged, but such is life.
If there is any lesson to be learnt here, perhaps it may be to be very clear in future why you would take someone into your business. If this is not based on fundamentally sound business principles, rather not consider it. Altruism is seldom a good basis for such a decision – in fact, this is probably true for all human relationships.
You are missing nothing, dear friend. You are only experiencing the pain of an original decision based on something unrelated to the thing it directly impacted on.
If your brother does not understand your position, perhaps it is because he prefers not to understand the simple fact that, wonderful guy as he may be, he may not be suited to the kind of business you were running. Nothing personal. Just a simple fact. Perhaps he is the one missing something? Or who finds it comfortable to keep missing something?
Warm greetings and good luck with resolving the problem!