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Sunday, November 01, 2009

Commercial lending giant CIT files bankruptcy

Government to likely lose $2.3 billion it spent to prop company up last year
updated 4:36 p.m. ET Nov. 1, 2009
NEW YORK - Lender CIT Group has filed for bankruptcy protection, in an effort to restructure its debt while trying to keep loans flowing to the thousands of mid-sized and small businesses.

CIT made the filing in New York bankruptcy court Sunday, after a debt-exchange offer to bondholders failed. CIT said in a statement that its bondholders have overwhelmingly approved a prepackaged reorganization plan which will reduce total debt by $10 billion while allowing the company to continue to do business.

"The decision to proceed with our plan of reorganization will allow CIT to continue to provide funding to our small business and middle market customers, two sectors that remain vitally important to the U.S. economy," said Jeffrey M. Peek, chairman and CEO. Peek has said he plans to step down at the end of the year. LinkHere


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