CIT Files for Bankruptcy
Not a surprise:
“CIT Group Inc., the 101-year-old commercial lender that saw its funding dry up in the credit crunch, 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 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., said it plans to exit court protection quickly due to support from bondholders, who voted for a “prepackaged” 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.”
Let’s see if Mr. Market thinks this is important tomorrow…
Source:
CIT Group Files Bankruptcy, Seeks to Cut $10 Billion in Debt
Tiffany Kary and Dawn McCarty
Bloomberg, Nov. 2 2009
http://www.bloomberg.com/apps/news?pid=20601087&sid=aKmvIUy3V8QY&pos=1
November 2nd, 2009 at 2:08 am
Will be characterized as Old News by the cheerleaders.
November 2nd, 2009 at 2:34 am
Priced in.
November 2nd, 2009 at 4:03 am
What exactly is priced in? 3 to 4% GDP growth is fully priced in says Rosie. I’m sorry but my feeling is that Mr Market has not changed in personality much since he was first perceived in 1934. What is amazing is how terrible Mr Market’s memory is and how he seems incapable of keeping anything in perspective.
November 2nd, 2009 at 7:09 am
@simon
You write as if market is a male.
Your description however, “…..what is amazing is how terrible Mr Market’s memory is and how he seems incapable of keeping anything in perspective….” reads more like one of the distaff side.
November 2nd, 2009 at 9:58 am
[...] CIT bankruptcy was not a surprise, but taxpayers are not too happy to learn that the $2.3 billion infusion will likely vanish. (Jim [...]
November 2nd, 2009 at 10:14 am
Taxpayer screwed again. Amend the Bankruptcy code now; make all taxpayer financial contributions, bailouts, etc nondischargeable under any chapter of the code regardless of the instrument or contract under which the funds are acquired or secured. Give the Federal Government top priority and the Fed Reserve 2nd priority. Make the code amendment effective upon enactment. This will protect the taxpayer going forward, because we will be paid first and or have a continuing lien of the assets of the company.
We were promised that if we gave the Treasury TARP funds that the taxpayer would make money.
Currently, taxes are not dischargable in Bankruptcy. The taxpayers need to be protected.
November 2nd, 2009 at 10:58 am
How does it benefit Goldman? It must, no?
November 2nd, 2009 at 12:14 pm
@madman130: I may be wrong, but I believe that I read somewhere months ago that Goldman has derivative contracts on CIT that pay off in the event of BK. Again, I’m going on memory here, but I think I’m right. Would this surprise anyone?