CIT to file for bankruptcy; continue lending operations
03 Nov 2009
CIT Group Inc, a leading provider of financing to small businesses and middle market companies, on Sunday said its board of directors has approved bankruptcy filing.
CIT said it would proceed with the voluntary filings for CIT Group Inc and CIT Group Funding Company of Delaware LLC with the US bankruptcy court for the southern district of New York.
The company said it has overwhelming support of its debt-holders to proceed with a prepackaged plan of reorganisation that will restructure the company's debt and streamline its capital structure.
None of CIT's operating subsidiaries, including CIT Bank, a Utah state bank, will be included in the filings. As a result, all operating entities are expected to continue normal operations during the pendency of the cases, CIT said in release.
"All classes voted to accept the prepackaged plan and all were substantially in excess of the required thresholds for a successful vote. Approximately 85 per cent of the company's eligible debt participated in the solicitation, and nearly 90 per cent of those participating supported the prepackaged plan of reorganisation," CIT release noted.
"Around 90 per cent of the number of debtholders voting, both large and small, cast affirmative votes for the prepackaged plan," CIT said, adding, "The conditions for consummating the exchange offers were not met."
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