CIT received $2.3 billion in government aid last year, files for Bankruptcy

Dum, Dum, Dum

CIT group filed for bankruptcy on Sunday afternoon – but under a so-called prepackaged bankruptcy plan that will enable it to emerge from court protection by the end of the year, under the control of its debtholders.

CIT received $2.3 billion in government aid last year, a bailout that came in the form of preferred stock. That will almost certainly be wiped out in the bankruptcy process, the first realized loss in the government’s rescue of the financial system.

CIT was the nation’s largest provider of what is known as factoring, a type of lending used heavily by retailers. The company has spent months trying to reassure its clients that it will remain open for business as stores ramp up for the holiday season. Relatively few other companies serve as factors, and among them are other embattled lenders like GMAC.

Advertisements
Published in: on November 2, 2009 at 11:50 am  Leave a Comment  
Tags: , , , , ,

The URI to TrackBack this entry is: https://pottokettle.wordpress.com/2009/11/02/cit-received-2-3-billion-in-government-aid-last-year-files-for-bankruptcy/trackback/

RSS feed for comments on this post.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: