We decided the following back when we started getting decent pay for gigs (which still doesn't seem to hold a candle to the gigs your twins are getting):
First, expenses are taken out of the gig money - usually just gas, but sometimes we pay the sound man or a guest musician a flat fee.
The PA owner (me, incidentally) gets a full equal share (up to $50) for use of the PA. Much cheaper than rental, and allows the owner (again, me) to pay for upkeep - cables, repairs, etc - that help the entire band. If we use house PA, and only use our monitor system, I only take a half share (up to $25).
Thus, after expenses, we split the money 5 ways - one of each of three band members, one share for PA, and one share goes into the band account.
For what it's worth, if the remaining money after expenses is less than $50, it ALL goes back into the band account.
As for the situation at hand, I'd haul that guy into small claims court and demand a REAL explanation. Who, exactly, is "the band" $1000 in the hole to? Mom and Dad of Mr. Rip-em-off?
As some have already said, this situation goes one of two ways: Either "the band" has spent $3800 on a PA, and now should liquidate the gear, repay the debtors, and split the remaining monies... OR "the band" was renting the PA, in which case the young man was committing fraud by renting the PA to himself (at 100% of the gig pay) and reinvesting the money into his own gear.
If it is the latter, you should find out what it would cost to rent a comparable PA, subtract that from monies earned, split the remainder three ways, and sue him for that. The $1000 owed would be his sole responsibility.
As far as a split goes, since there was no initial agreement, the judge should default to a fair split, rather than a "rental" situation.
But these folks need to be taught something about the correct way to do business.