The Secured Lender
Stuart J. Glick
April 01, 2009
With the continuing turbulence in the financial and credit markets, it comes as no surprise that the rate of commercial loan defaults has dramatically increased over the past several months. As the economy appears to move toward a state of affairs last seen during the Great Depression, every lender must have a strategy to handle defaults on its secured commercial loans. But perhaps that strategy should be premised upon lessons learned long before the Great Depression.
Over 2, 500 years ago, the legendary Chinese military commander Sun Tzu wrote his military treatise The Art of War. Since then, not only military figures, but business schools, CEOs, public administrators and others have applied Sun Tzu's treatise to their endeavors. Quite simply, The Art of War is applicable to any situation where two or more parties are pursuing opposing objectives.
This article applies The Art of War to the lender/borrower relationship when a loan goes into default. Under such circumstances, the lender's relationship with its borrower becomes, to varying degrees, adversarial as each pursues its own interests. As set forth, Sun Tzu's time-honored principles provide guidance to succeeding in this conflict too.
For a copy of this article, please contact Mr. Glick