My position with Owners is if you really want to maximize the sale of your business, admit what you know to be true and let the family member go. Or change their position.
They know better than you do how much damage is being done to the organization by their actions or lack of action. You may be surprised when your child or sibling or other relative actually thanks you for ending their misery.
Staff will be relieved and productivity will likely rise.e to edit.