I hired this lady to help me start with a project in Indonesia 2 years ago. I paid her what she asked and mentioned some profit/revenue sharing schema as a bonus if things work out. She was first employee/contractor. She contracted local companies to work with us.
After a year working with her started to be difficult. I told her I'm replacing her with someone else. I was surprised she took it lightly. And then after two years (now) she is threatening me to report me to local authorities for exploiting locals ("her") because she considers herself as a co-founder of the company. This is classical miscommunication and is my fault for sure. However, I don't feel any obligation to pay her anything. I'm willing to pay her small bonus out of my own pocket for said miscommunication but she’s asking for 8 times more than that. I would like to handle this in a nice way and learn a lesson here. I don't think said reporting to authorities would have any impact on me and my life as I don't live and want to go to Indonesia, but if she would be creative she can hurt the business in other ways. I don’t want any bad blood and now the project have more stakeholder so, I want to make it sustainable business and I definitely shouldn't put it in any danger.
Any ideas how should I handle this?