In 52 years I have never experienced such a problem as yours. My students know that I would not tolerate such a situation as you describe. I have had the occasional idiot who I have thrown out physically. You should have dealt with this situation at the outset.
Your students will be well aware of your discomfort, to win back their respect you need to deal with the problem ` NOW `.........
Either you run the dojo, or the other guy does ? only you have the answer.
Ellis Schools of Traditional Aikido