United States : CIT Group Files Bankruptcy, Seeks to Reduce Debt.Byline: babalu03 CIT n. 1. A citizen; an inhabitant of a city; a pert townsman; - used contemptuously. Which past endurance sting the tender cit. - Emerson. Group Inc., the 101-year-old commercial lender that saw its funding dry up in the credit crunch Credit Crunch An economic condition whereby investment capital is difficult to obtain. Banks and investors become weary of lending funds to corporations thereby driving up the price of debt products for borrowers. , filed for bankruptcy in an effort to cut $10 billion in debt following a failed debt exchange and U.S. taxpayer bailout. CIT listed $71 billion in assets and $64.9 billion in liabilities in a Chapter 11 petition yesterday in U.S. Bankruptcy Court bankruptcy court n. the specialized Federal court in which bankruptcy matters under the Federal Bankruptcy Act are conducted. There are several bankruptcy courts in each state, and each one's territory covers several counties. in Manhattan. The Treasury Department said the government probably won t recover much, if any, of the $2.3 billion in taxpayer money that went to CIT. The lender, which funds about 1 million businesses such as Dunkin Brands Inc. and Eddie Bauer Holdings Inc., plans to exit court protection next month after bondholders voted in favor of a prepackaged pre·pack·age tr.v. pre·pack·aged, pre·pack·ag·ing, pre·pack·ag·es To wrap or package (a product) before marketing. Adj. 1. plan. None of CIT s operating subsidiaries, including Utah-based CIT Bank, were included in the filing, and operations will proceed as normal, CIT said in a statement. Short term, it s going to cause some difficulties for startups and smaller borrowers, said Jean Everett, a partner at Hiscock & Barclay LLP LLP - Lower Layer Protocol focusing on financial institutions and lending. CIT lent across so many sectors, it s sort of difficult to predict how it ll affect each sector. The bankruptcy, the fifth-largest by assets, will allow CIT to continue to provide funding to our small business and middle-market customers, Chief Executive Officer Jeffrey Peek said yesterday in a statement. December Confirmation The case was reassigned today to U.S. Bankruptcy Judge Allan Gropper from Judge Robert Gerber. CIT asked Gropper to schedule a confirmation hearing on its reorganization plan A scheme authorized by federal law and promulgated by the president whereby he or she alters the structure of federal agencies to promote government efficiency and economy through a transfer, consolidation, coordination, authorization, or abolition of functions. as soon as possible after Dec. 1. Shareholders may be wiped out as common and preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. is likely to be canceled when the company ends its reorganization. CIT asked for court permission to borrow $500 million from Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. Corp., saying the loan would fill a financing void after other lenders refused to extend it more credit. The company has $1 billion from investor Carl Icahn to fund operations while it reorganizes. The credit line, to be drawn on until Dec. 31, will be a so-called debtor-in-possession loan. It also expanded its $3 billion credit facility by another $4.5 billion on Oct. 28. CIT had asked bondholders to exchange $30 billion in debt for new securities and equity. Icahn made a competing offer. After New York-based CIT s offer expired at midnight on Oct. 29, the company said it was tallying 150,000 ballots. Debt holders rejected the exchange offer, with 90 percent of holders who voted opting for the company s prepackaged bankruptcy plan. Copyright : Euclid Infotech Pvt. Ltd. Provided by Syndigate.info an Albawaba.com company |
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