NEW YORK (
aims to emerge from bankruptcy protection this Thursday following a U.S. Bankruptcy Court's approval of its prepackaged reorganization plan.
CIT, which was the largest lender to small and mid-sized businesses in the United States, filed for bankruptcy protection on Nov. 1. The filing occurred several weeks after the
Federal Deposit Insurance Corp.
refused to guarantee CIT's debt, as it did for larger lenders, including
and large banks like
Bank of America
CIT's plan calls for a $10.5 billion reduction in its debt load and pushes back certain debt obligations by three years. Current market prices suggest recoveries for most bondholders of less than 80 cents on the dollar.
CIT will get a new public listing, though its business will chiefly consist of recouping payment on outstanding loans written down to about $34 billion. While CIT will attempt to move business into its Utah-based bank and begin lending again, whether or not those efforts succeed will largely depend upon whether it gets approval from the FDIC.
Written by Dan Freed in New York