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Judgment & ambiguity · Prioritizing without clear signal

A commercial borrower has stopped performing and you're weighing paths — a restructure that extends and modifies terms, or moving to foreclose on the collateral. Cash flow is uncertain, the collateral value is uncertain, and time favors neither cleanly. How do you sequence the decision?

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The whole decision reduces to one comparison: my expected recovery under a workout versus my expected recovery through liquidation, net of time and cost — so I sequence to resolve the two unknowns that drive it.

The full answer: structure, worked example, likely follow-up.

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