(2 November 2009 – USA) CIT has made a filing in the New York bankruptcy court after a debt-exchange offer to bondholders failed.The lender, CIT, has filed for bankruptcy protection putting the future of thousands of small and mid sized businesses that rely on their loans in jeopardy.
The majority of CIT bondholders have approved a pre-packaged reorganisation plan in an effort to reduce total debt by US$10 billion (A$10.92 billion).
The bankruptcy protection filing which is one of the largest in US corporate history will see CIT wipe out its current holders of its common and preferred stock, which could result in the US government losing the US$2.3 billion invested last year to prop up the failing company.