The loan is from partner a, that partner b needs to make whole. What I'm asking is what should be paid back, the original loan or current balance? Partner a says partner b owes partner a half of original loan (x) plus half of all interest payments paid (z). Partner b says half of remaining balance (y) plus half of interest payments (z).
It sounds to me as if the partnership accounting maybe hasn't been done correctly.
But the LLC should honor its loan agreement with partner A if it can. (This would be true with any loan obviously.)
And if it can't, the LLC limits the liabilities of its members to their original investment.
E.g., if partner A loans $100 to LLC and then both partner A and B each invest $50 into the LLC, $200 of money has been contributed. If the LLC loses the entire $200, nobody gets any money back. Partner A loses $150 and partner B loses $50.
And the one thing that should happen here is that, essentially, the partnership tax return and its K-1s do capital account maintenance (partnership capital account bookkeeping) to reflect this reality.