Listen, I grew up in Brooklyn, New York. When I was a kid, I saw guys get taken away dead - their heads split open by a baseball bat, shot with guns, etc. The reason? Usually, they owed money. Even the worst gangsters won't do that unless somebody really pushes them to the limit. Fighting is not the answer. Give him as much as you can muster, and tell him that you'll pay him the rest later. After you've paid him off, don't have anything to do with him anymore.

Believe me, I've known some very "bad" people - not by choice, mind you, just from where I grew up. You made a mistake doing business with this guy, so don't compound it by allowing violence to enter into it. Of course, you have to defend yourself if it comes down to that, but your job now is to see that it does not. There are people that are just self-destructive, and this idiot sounds like one of them. They ALWAYS want to take others down with them when they self-destruct. Don't be an accomplice to this stupidity. Any honest person, with experience in the streets, will tell you the same thing.