CIT's Peek Out, but Are Geek CEOs in?

Updated from Wednesday, Oct. 14.

NEW YORK (TheStreet) -- The planned resignation of CIT Group(CIT Quote) boss Jeff Peek seems very much in keeping with the times.

Peek's resignation Wednesday was not a surprise, though most people had expected him to wait until CIT's restructuring plan was on better footing. CIT presented an offer to its bondholders on Oct. 1 that would reduce its debt and stave off a bankruptcy filing while heavily diluting shareholders. The debt exchange offer expires on Oct. 29.

Since then, however, going the bankruptcy route has started to look like a more likely scenario. Two of the company's six key creditors, including bond giant PIMCO, have resigned from a steering committee of creditors. Now Peek's abrupt announcement of his resignation, which will come at the end of the year, is adding to the gloom. CIT shares tumbled Tuesday on news of Peek's plans but the stock rallied to close at $1.06 on Wednesday. It rose a further 10 cents in after-hours trading.

A Reuters report late Wednesday said CIT is getting closer to finalizing the terms of a new loan that would give the commercial lender $3 billion to $6.5 billion. The terms of the loan, being arranged by Bank of America, could be finalized as soon as this week, two sources said.

Peek seems very much like a boom-time CEO, so from a symbolic point of view, his resignation makes sense. He is a regular on New York's social circuit, married to a journalist and the principal driver behind the company's move to a pricey Manhattan headquarters in the trendy Bryant Park section of Midtown.

What he did not do was react quickly enough when the capital markets seized. He lobbied heavily to get the Federal Deposit Insurance Corp. to guarantee the company's debt, as it had done for larger lenders like General Electric(GE Quote), Goldman Sachs(GS Quote) and JPMorgan Chase(JPM Quote), but he did not have a contingency plan. CapitalSource(CSE Quote), another too-small-to-bail-out lender, was more nimble.