The vice president of corporate lending at London Life received a message that one of its borrowers, Air Atlantic, had not sent its first quarter loan payment and was, therefore, in default of its loan. London Life had loaned Air Atlantic close to $20 million in the late 1980s to buy two deHavilland Dash-8 aircraft. Also, he had deferred $4.5 million of future payments for Air Atlantic. The vice president wondered if Air Atlantic's condition would improve as the North American economy continued to show signs of strengthening. If he insisted on payment, he realized it could begin a process leading to the eventual bankruptcy of Air Atlantic.
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