CIT and Icahn: Collateral Damage

NEW YORK (TheStreet) -- CIT Group (CIT Quote) now looks more likely than ever to file for bankruptcy following a $6 billion loan offer from financier Carl Icahn.

As Icahn made clear in his exclusive interview with TheStreet Monday, he doesn't want the company spending more money. In other words, he wants to keep CIT afloat long enough to collect on as many of its outstanding loans as he can, and then wind down the company.

Icahn also pointed out in a letter to CIT's board that he is the company's largest lender. That means his refusal to go along with either a proposed debt exchange or prepackaged bankruptcy plan will account for a big chunk of the votes. On top of that, Icahn says other large bondholders he has spoken with are likely to reject the plan.

Another powerful party that appears to have an incentive to see CIT fail -- or at least would not appear to mind terribly if it did -- is Goldman Sachs (GS Quote). As the Financial Times reported earlier this month, the investment bank will make a tidy $1 billion profit if CIT fails.

Icahn doesn't sound like he's interested in trying to revive CIT's lending business. Many people thought its factoring business, where CIT takes over receivables from retailers, was highly valuable. CIT describes it on its Web site as one of the largest in the world, but Icahn describes it in his interview with TheStreet as "little" and "sort of melting away."