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Post a commentMajor-lender CIT files for bankrpptcy
WASHINGTON - After struggling for months to avert bankruptcy, lender CIT Group has filed for Chapter 11 protection to restructure its debt while trying to keep badly needed loans flowing to thousands of mid-sized and small businesses.
CIT made the filing yesterday in New York bankruptcy court. CIT said that its bondholders overwhelmingly opted for a prepackaged reorganization plan which will reduce total debt by $10 billion while allowing the company to continue to do business.
The Chapter 11 filing is one of the biggest in U.S. corporate history, following Lehman Brothers, Washington Mutual, WorldCom and General Motors. CIT's bankruptcy filing shows $71 billion in finance and leasing assets against total debt of $64.9 billion.
Such a prepackaged bankruptcy speeds up the process of restructuring CIT's debt and could allow it to exit court protection by the end of the year. CIT said the plan also cuts cash needs, which should help it return to profitability more quickly.
- Associated Press
