Posted on 07/13/2009 5:07:34 AM PDT by longtermmemmory
CIT Group Inc. is working with a premier bankruptcy firm as the troubled commercial lender awaits word on whether it will receive funds from a federal program designed to help banks, the company confirmed Saturday.
The New York-based company has engaged Skadden, Arps, Slate, Meagher & Flom LLP, which has a prominent bankruptcy practice. ...
However, acccording to the company CIT has worked with Skadden for "several years."
"Skadden is one of the principal law firms representing CIT," company spokesman Curt Ritter said in an e-mail response to an AP query. "They represent the firm on a wide variety of corporate matters. CIT will not comment on any specific aspect of their engagement."
Skadden did not return calls for comment.
The financier to small and mid-sized businesses is facing a liquidity crisis absent help from the government, according to analysts.
Shares of CIT closed Friday down 18 percent on heavy trading volume over uncertainty over federal aid.
CIT is awaiting word on whether it will receive funds from the Federal Deposit Insurance Corp.'s Temporary Liquidity Guarantee Program, which lets cash-squeezed companies issue government-backed bonds to raise capital at a lower cost. As of June 8, the program has backed $335.4 billion of debt.
FDIC Chairwoman Sheila Bair has said that the program tries to be inclusive but applicants must meet certain requirements. Generally, the program gives preference to companies with high credit ratings or that are considered pivotal to the overall economy. Ritter said Friday the company's application to the FDIC program remains outstanding.
On Wednesday, credit ratings agency Fitch Ratings downgraded the company's issuer default, individual and debt credit ratings deeper into junk status, affecting $35 billion of debt.
CIT already received $2.3 billion in government bailout funds in December, as part of the $700 billion rescue fund ...
(Excerpt) Read more at chicagotribune.com ...
http://wallstreetblips.dailyradar.com/story/cit_hires_bankruptcy_adviser/
CIT is a small business lender.
By eliminating the small business lending, the federal government essentially socializes small business lending into the small business administration.
The news for CIT is even worse today. It seems clear that CIT failing fits in to Obama socialism.
never let a crisis go to waste.
Just think of all the taxing data the federal government will now have. If you borrow from the gov, the gov can tax you more.
So we’re not going to “let the market decide”?
Scary.
CIT Group working with bankruptcy adviser,Obama must be back in the states.
Wow this could be really ugly. CIT is the largest provider of factoring services in the country. They have spent years buying up their competitors with a few exceptions.
This would hit the manufacturing to retail trade like a ton of bricks...not good.
Agree wonder how the dow will react?
ahh be we have already left the station with that train.
The BIG lenders have been rescued for the BIG clients and the BIG insiders.
This is for small business. Notice the difference. When the “too big to fail” excuse was used it was to rescue the large financial operators.
CIT is for the smaller business lending. (see competition to the Small Business Administration)
This is like the public option competition to health care. It is transparent what is happening here. If you want to have a line of credit, you SHALL go to the government. (and they will tax you accordingly)
this is why Obama was pushing the “small business TARP” trial balloon.
it was no accident.
CIT failing is a crisis being allowed to happen to further push the obama agenda.
Soooo...bailouts are good then?
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