consultant that is family friend

I work for a family run business (2nd generation – enough said). We outsource some programming to a consultant that has become a family friend over the years. I was promoted to IT Mgr. a few years ago and much to my disdain, he was basically untouchable even though we are way overpaying him. Recently, he found out that we are replacing all of his sub-systems with some new BI tools from Cognos. He offered to helo with the conversion and we declined. He then threatened me by saying “We’ll have to see what “….” says this afternoon. I’m at a loss on how to handle this. Has anyone else run into this??