I have to say that I agree with both Pinkboy & DaveM on this. You really need to take control & DO something. You have to separate the friendship from the Business. It appears you have an issue with the Business, not Nathan, personally, so get in there and protect YOUR Business. If you consider Nathan to be a friend, then you need to let him know that this is a Business decision, not a personal attack.
The PM that I was using in this quote below, I also considered a friend at the time. Much of the stuff that happened, happened because I believed him when he said that there was an issue with the software they use for their statements, and that was why they couldn't provide me with statements. My gut told me to get out of there, but like a fool, I held on, because he was a 'friend'.
There was another PM in St Mary's that embezzled a heap of money. Sent some LL's to the wall. I got done for around $25k, but couldn't get any money out of him because he declared Bankruptcy. The worst part was, that even months after moving everything from him to another agency, you'd still find more bits missing - like Bond's not lodged (and pocketed).
I had no idea on where we stood at the time, and how much rent each tenant had paid on each property, or how far in arrears each property was. I later found out that he personally went to the tenants address and collected payments in cash, and didn't provide a receipt, so by the time I moved everything to the new PM, it was a real mess.
We had tenants stating that they were paid up to date, and more than one of them telling the same thing, so no reason to doubt it, but no proof either. They also wouldn't release records to my new PM, but like Dave said, once the deed was done & the new PM in place, things started to get back to normal, however we were still paying for this years later as tenants moved on & there were no bonds lodged.