Sometimes things that sound good at the time, don't end up very well. Back in 87 it probably sounded like a great thing. I am just guessing, but I would almost bet he would say (the FIL) well we gave you free babysitting all those years, and we sold the house to your wife cheap, and probably a million other things. Just saying he may not feel he is taking advantage, he may well feel you and the DW owe it to him.
I know there have been a few times I almost got tangled up with the family in a few business deals, until a good friend talked some sense into me. As dealings with family can end very badly. Not always but sometimes they do. Way to much involved with family.
May, not be any easy way out. Short of going to war, and creating bad feelings all around. Only you can deciede if the situation is worth that.