Updated to include latest share price, response from Treasury Department.
NEW YORK (
) -- The U.S. Treasury has officially lost its entire $2.33 billion TARP investment in
(CIT - Get Report)
, according to a company
with the Securities and Exchange Commission after Monday's closing bell.
The Treasury made the investment in CIT in December 2008, but CIT then ran into trouble after the
Federal Deposit Insurance Corp.
refused to guarantee its debt, as the FDIC did for larger lenders, including
(GE - Get Report)
and large banks like
(C - Get Report)
Bank of America
(BAC - Get Report)
. CIT ended up filing for bankruptcy protection on Nov. 1 but was able to reorganize and return to a public listing on Dec. 10.
Contrary to what many assumed, the bankruptcy filing did not extinguish all hope for a taxpayer recovery. The Treasury and other preferred shareholders received complex securities called contingent value rights (CVRs) which could have been worth something if CIT Group's stock had reached the mid-50s ahead of Monday's session,
according to the estimate of another investor who held CVRs.
CIT Group is the largest loss on record under the TARP, though
(AIG - Get Report)
and Citigroup each owe the Treasury at least $10 billion each, according to