I am thinking you should confront him about the infidelity properly and then go into protection phase.. this means you and the kids offer NO contact to him at all... he doesn't see YOU OR the kids...

He walked out, so he gets nothing.

The thing is, right now he's walked out and he's using you as a lifeboat... he figures if everything turns out crap you will be there still... he wants a backup plan and you are it.

The best way for YOU to be healthy again, and I think the best way to get him to give you respect again is for you to shut him out completely - protection phase.. its EASY for you to do compared to many other people on this forum... many of them still live with thier spouses which makes protection phase almost impossible to pull off.. for YOU its a lot easier

I think you confronting him about the infidelity, exposing his cheating to everyone who may put pressure on him, and then you not letting him contact his children will all put a LOT of pressure on him not to mention the economy and his failing business...

Those four pressure points may be enough to get him to give up his fantasies and come back and try to act like a husband and an adult... a long road, but a far more respectable one than the road he's on right now