If you need to deliver some negative news to someone today, take them out to lunch or dinner to discuss things. Not only will the comforting food make them much more receptive to what you have to say, but being in a structured situation will encourage more discussion: no one's going to stomp away when they haven't finished their dessert. You two need to talk this thing out, and figure out how things should move forward. Oh, and you should pick up the tab!