Blog of Intellectual Capital

A unique graduate school for Diplomats, Warriors and Spies

John Lenczowski may be the greatest American national security strategist you never heard of.  His reputation has never gone much beyond the beltway. Yet, as President Reagan’s NSC Advisor for European and Soviet Affairs from 1983-87, he was among the principal architects of the Cold War strategy.  

Led by the United States, the West defeated the Soviet Union and liberated millions of souls in one of the greatest victories of modern history. That it ended with a whimper and not a bang is a testament to an extraordinary Grand Strategy, including a wide range of hard and soft power in a coordinated effort to defeat the adversary economically, technologically, diplomatically, militarily, but also psychologically, by winning hearts and minds of entire populations behind the Iron Curtain.  This is how to win without war, which the ancient Chinese strategist Sun Tzu deemed the acme of skill. 

Based on his experience, in 1990 forward-thinking Lenczowski founded The Institute of World Politics (IWP), a fully accredited independent graduate school of national security, intelligence, and international affairs. He saw that no school was teaching coordinated grand strategy in any comprehensive way, and that this was vital to overcoming the silo effect of insulated policy makers in the defense, intelligence, diplomatic and other agencies, as well as the legislative branch.  

Lenczowski also wanted his students to have a clear-eyed view of the global strategic environment, an appreciation for American history and founding principles, and a sound foundation in ethics and character formation.  He wanted to educate informed patriots, under the belief that one cannot defend a country that one does not understand and love. 

A crown jewel of IWP is the 45-member faculty, comprised almost entirely of scholar-practitioners, who have deep practical experience in the arts of statecraft they teach.  Many possess rare and precious knowledge of statecraft arts which have been poorly resourced or otherwise neglected since the end of the Cold War, including for example counterintelligence, public diplomacy, and strategic influence, so critical today with the revival of great power competition.  

Like many brilliant ideas, the intellectual architecture of the Institute seems obvious after the fact.  Yet IWP is virtually alone in its comprehensive curriculum and faculty composition.

Today hundreds of the school’s alumni are serving in some of the most sensitive leadership positions in the national security arena.  They have helped author recent National Security and National Defense strategies, commanded all the land troops of NATO, led a highly successful effort to stop the theft of intellectual property in Silicon Valley, and won the highest FBI agent awards, among many other achievements.  

This month The Institute of World Politics celebrates its 31st anniversary.  Cold War architect John Lenczowski is stepping aside as President but remains as Chancellor. IWP demonstrates that leadership and expertise in national security may flow from wellsprings far removed from the brand-name universities.   The courage and vision of one man devoted to the essence of Western values and democratic principles will persevere — and help to shape the next generation of young leaders educated in the arts of effective statecraft.

The Hon. James Anderson is President of The Institute of World Politics and former Deputy (and then Acting) Under Secretary of Defense for Policy.  John Lovewell is  Chairman of IWP’s Board of Trustees.

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Gerbsman Partners has been involved with numerous national and international equity sponsors, senior/junior lenders, investment banks and equipment lessors in the restructuring or termination of various balance sheet issues for their technology, life science, medical device, cyber security, solar and cleantech portfolio companies. 

These companies were not necessarily in crisis, but had cash (in some cases significant cash reserves) and/or investor groups that were about to provide additional funding. In order to stabilize their Go-Forward-Plan and maximize cash resources for future growth, there were specific needs to address Balance Sheet and Contingent Liability issues as soon as possible. 

Some of these areas where Gerbsman Partners has assisted, these companies have been in the process of termination, restructuring and/or reduction of:

Prohibitive Executory Real Estate Leases, Computer and Hardware-related Leases and Senior/Sub-debt Obligations

            Gerbsman Partners was the “innovator” in creating strategies to terminate or restructure prohibitive real estate leases and senior and sub-debt obligations.  To date, we have terminated or restructured $810 million of such obligations for private and public companies, and which has allowed them to return to financial viability. 

Accounts/Trade Payable Obligations

            Companies in a crisis, turnaround or restructuring situation typically have account and trade payable obligations that become prohibitive for the viability of the company on a go-forward-basis. Gerbsman Partners has successfully negotiated mutually beneficial restructurings that allowed all parties to maximize value based on the reality or practicality of the situation.

Software and Technology-related Licenses

            As per the above, software and technology-related licenses need to be restructured/terminated in order for additional capital to be invested in restructured companies. Gerbsman Partners has a significant, successful track record in these areas.

About Gerbsman Partners

Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in underperforming, undercapitalized and undervalued companies and their intellectual properties. Since 2001, Gerbsman Partners has successfully maximized the values of 113 companies in a wide and diverse spectrum of industries. In the process, GP has successfully restructured/terminated over $810 million of real estate executor contracts and equipment lease/sub-debt obligations, and has assisted in over $2.3 billion of financings, restructurings and M&A transactions.

Gerbsman Partners has offices and strategic alliances in Boston, New York, Washington DC, McLean VA, San Francisco, Orange County, Europe and Israel. 

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• THE GREAT RESTRUCTURING OF 2020 revisited in 4^th qtr 2021

• The Wuhan Coronavirus has fundamentally changed the world and United States economies.

• In many cases, those changes will be permanent.

• The unintended and unforeseen consequences of the crisis will ripple through all aspects of the world and United States economies for many years.

• Many new uncertainties have since arisen, including unprecedented and ever-increasing worldwide debt, inflation, supply chain interruptions, and huge political uncertainty, particularly with regard to China.

• The economic relationships between debtors (individuals, companies, governments) and creditors (vendors, lessors, lenders, employees) and owners (equity holders) are now fundamentally unbalanced, just as has occurred in all previous financial crises.

• ‘WHAT WE KNOW SO FAR’

• As in the Dotcom Crash, the 9/11 Crash and the 2008 Crash, those economic relationships will be rebalanced by renegotiation, sale, bankruptcy and liquidation, so that assets are redeployed, asset value is monetized and maximized and economic activity can continue.

• The world has survived far worse and has revived strongly. For example, World War I, followed by the Spanish Flu, followed by the huge economic growth of the 1920’s. Humans are wired to adapt to and to overcome hardship. We still have the land, resources, infrastructure, intellectual property, technology and talent that we had in January 2020. Huge economic dislocation can also spur huge creativity, energy and innovation, such as has happened with the acceleration of remote work and ecommerce.

• There have been major economic losers, but also major economic winners.

• The United States is self-sufficient in food and energy and is the largest market and the greatest economic and political safe haven in the world. We are the best-positioned country in the world to emerge stronger than before.

• The virus appears to be moderating with increased distribution of vaccines. We expect that it will continue to be with us on a permanent basis, like the seasonal flu.

• The world appears to have largely adapted to the virus, although there will be continual flareups and after-shocks.

• ‘WHAT WE DO NOT KNOW’

• The long-term effects of historically unprecedented government economic stimulation and significant increase in the deficit and of the worldwide political instability created by the virus.

• The availability of cash to sustain under-performing companies and businesses.

• How young CEO’s, investors, bankers will react to a situation that they have not seen or lived through before.

• WHAT HAPPENS NEXT!

• We expect that the world health and economic situation will become clearer over the next few months. We expect to see a giant wave of economic restructuring that will last several years.

• Early business crises will be driven by lack of cash. Based on our experience in several previous economic crashes, the speed with which business owners and managers face reality, preserve, protect and forecast cash and take effective action will determine which businesses survive and which die.

• It is critical for companies, investors and lenders to face reality and act quickly. When things are going bad, waiting seldom improves the situation. In over 40 years of crisis management and restructuring experience we have never seen a board of directors act too quickly when faced with a crisis. We have all too frequently seen a board act slowly or not at all.

• Gerbsman Partners believes that companies, investors and lenders should to call for assistance early. The earlier professionals can get involved in the process, the better the potential outcome in maximizing enterprise value.  Again based on experience, boards, investors and lenders request assistance only after a company has little cash or is out of cash. Many more options exist to maximize enterprise value if a company has some running room.

 Gerbsman Partners focuses on maximizing enterprise value for stakeholders and shareholders in under-performing, under-capitalized and under-valued companies and their Intellectual Property, as well as maximizing value for Intellectual Property Patents. Since 2001, Gerbsman Partners has been involved in maximizing value for 113 technology, medical device, life science, solar, fuel cell, cyber security, consumer and digital marketing companies and their Intellectual Property and has restructured/terminated over $810 million of real estate executory contracts and equipment lease/sub-debt obligations. Since inception in 1980, Gerbsman Partners has been involved in over $2.3 billion of financings, restructurings and M & A Transactions.

Gerbsman Partners has offices and strategic alliances in San Francisco, New York, McLean, VA/Washington DC, Orange County, Boston, Europe and Israel.

Steven R. Gerbsman
steve@gerbsmanpartners.com

“Do not go where the path may lead, go instead where there is no path and leave a trail.” – R.W. Emerson

“Never, never, never give up.” – Winston Churchill

“The seeds planted today are the flowers that will bloom tomorrow.”