NEW YORK ( TheStreet) -- The rally in shares of CIT Group ( CIT) is unlikely to be enough to help the U.S. Treasury recoup any of its $2.33 billion TARP investment in the lender, according to an investor who owns CIT securities similar to those owned by the Treasury.

All that's left of the Treasury's investment at the moment is represented by complex securities known as contingent value rights (CVRs), which the government received when CIT filed for bankruptcy protection near the end of last year. Whether these securities turn out to be worth anything depends upon a complex formula tied in large part to the performance of CIT's stock during the first 60 days after it emerges from bankruptcy.

CIT Group shares have had an impressive run since being relisted Dec. 10. As of Friday's close at $32.25, they were up more than 15% since the company's emergence. However, Zachary Prensky, manager director and founder of Little Bear Investments estimates that CIT's stock would need to reach the mid-50s before the Treasury would have a hope of recovering anything on its CVRs. Prensky owns CVRs that have a slightly better chance of recovery than the Treasury's CVRs, though he too has little chance of recovery.

Further complicating the issue is that CIT's reorganization plan does not specify whether the 60-day period refers to trading days or calendar days. Prensky says he has been unsuccessful in getting CIT to clarify this issue for him, and a CIT Group spokesman did not respond to an e-mail message from TheStreet asking about the CVRs. A Treasury spokeswoman also did not respond.

For CIT to thrive long term, it needs to shift to a funding model that is based on gathering bank deposits, a much cheaper form of funding than issuing debt.

Many observers are skeptical about whether CIT will be able to gain the regulatory approvals needed to grow its bank. The FDIC refused to guarantee CIT's debt last year, as it did for General Electric ( GE) and large banks like Citigroup ( C), Bank of America ( BAC) and Wells Fargo ( WFC). It also issued a cease-and-desist order to CIT's Utah-based bank affiliate, preventing it from growing certain types of deposits, or from lending to the parent company.

Prensky, however, is bullish on CIT's prospects and has added to the common shares he received when CIT was reorganized. He believes regulators will not be able to keep CIT's cease-and-desist order in place indefinitely if the company continues to strengthen its balance sheet.

"It's a matter of when, not if," Prensky argues.

For taxpayers, however, the clock is ticking. Even if the 60 days turn out to be trading days, CIT shares would need to reach the mid-50s by early March for Treasury to recoup any of its investment.

-- Written by Dan Freed in New York.