A Truly Evil Competitor: How to Cope?

Readers, today I'm going to ask for YOUR advice, because this is a problem that's bothered me for two decades and I still don't have a good answer.

I'm asking about this now because hard times create desperate people, and I suspect that some of us will be running into competitors who are willing to cross the line in order to win.

A while back, I found myself in a sales situation against a now-defunct software firm. We had a running prototype and all the competitor had was an overhead slide, so we definitely would have been able to help the customer more quickly and with less risk.

Things were a little tense. When the two teams presented to the decision-makers, I gave a friendly "hello!" to the competing rep and he responded by telling me to, uh..., "get lost."

Except he used an expression that I can't use in this blog.

The decision-makers consisted of a committee of four men and one woman. During the sales cycle, the competing rep rented hookers for at least two of male decision makers. The female decision-maker received a telephoned death-threat.

We lost the business.

This was the first time that I had been confronted with a truly evil competitor. I had no idea how to deal with the situation then, and I'm still at a loss.

We couldn't go to the police, because there wasn't any evidence, just rumors (although from a very credible source). I'm not sure what they could have done anyway.

I'm more than ready to compete in a fair fight, but what do you do when the competitor breaks the rules? Or even breaks the law?

READERS: How would you have handled the situation?