CIT files for Chapter 11 bankruptcy protection
The bankruptcy protection filing is one of the biggest in United States' corporate history. More on Financial crisis | Top 10 US bank failures | Global icons crash
By Agencies |
WASHINGTON: Lender CIT Group has filed for bankruptcy protection, a potential blow to the thousands of small and mid-sized businesses that rely on the company for loans to keep their operations afloat.
CIT made its filing in New York bankruptcy court on Sunday, after a debt-exchange offer to bondholders failed. CIT says the majority of its bondholders have approved a prepackaged reorganization plan which will reduce total debt by $10 billion while allowing the company to continue to do business.
CIT's operating subsidiaries, including CIT Bank, are not included in the bankruptcy filing, and expect to continue operating.
CIT's move will wipe out current holders of its common and preferred stock, likely meaning the U.S. government will lose the $2.3 billion it sunk into CIT last year to prop up the ailing company.
The company suffered as the global credit crisis left it unable to fund itself, and the recession left it with too many bad loans.
The bankruptcy protection filing is one of the biggest in US corporate history.
CIT made its filing in New York bankruptcy court on Sunday, after a debt-exchange offer to bondholders failed. CIT says the majority of its bondholders have approved a prepackaged reorganization plan which will reduce total debt by $10 billion while allowing the company to continue to do business.
CIT's operating subsidiaries, including CIT Bank, are not included in the bankruptcy filing, and expect to continue operating.
CIT's move will wipe out current holders of its common and preferred stock, likely meaning the U.S. government will lose the $2.3 billion it sunk into CIT last year to prop up the ailing company.
The company suffered as the global credit crisis left it unable to fund itself, and the recession left it with too many bad loans.
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The bankruptcy protection filing is one of the biggest in US corporate history.
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