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      11-01-2009, 10:10 PM   #1
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CIT Files Bankruptcy; U.S. Unlikely to Recoup Money

Wasn't someone on here claiming "don't worry about it, we'll get the money back"? Ah well, there goes that plan.

http://www.bloomberg.com/apps/news?p...d=a3.t_GrxbL2U

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Nov. 1 (Bloomberg) -- CIT Group Inc., a 101-year-old commercial lender, filed for bankruptcy to cut $10 billion in debt after the credit crunch dried up its funding and a U.S. bailout and debt exchange offer failed.

CIT listed $71 billion in assets and $64.9 billion in debt in a Chapter 11 filing in U.S. Bankruptcy Court in Manhattan. The U.S. Treasury Department said the government probably won’t recover much, if any, of the $2.3 billion in taxpayer money that went to CIT.

...

According to the petition, CIT’s largest unsecured claim holders were Bank of America Corp., as collateral agent for a $7.5 billion claim, and Bank of New York Mellon Corp., as a trustee for retail bonds with a claim of $3.2 billion. Canadian senior unsecured notes have a claim for $2.1 billion, and Citigroup Inc. also has a $2.1 billion claim as an administrative agent to bank debt due 2010.
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      11-02-2009, 02:37 AM   #2
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CIT going under is a huge deal, and it's barely being reported. If commercial lending goes under then things are going to get so crazy. The worst case is that we'll see healthy, profitable businesses dropping left and right because of cash flow problems. Unemployment will skyrocket. That's the kind of thing that could trigger a depression.
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