Posted on 10/31/2009 7:32:00 AM PDT by reaganaut1
The $2.3 billion in taxpayer money spent to save CIT Group Inc. is likely to be wiped out, as the lender prepares to file for bankruptcy protection in a high-stakes restructuring plan aimed at keeping the firm in business.
People familiar with the plan said CIT, a major lender to small businesses, intends to file for bankruptcy-court protection in New York within days, perhaps as early as Sunday or Monday. Financial firms such as CIT have historically been sold off or wound down after a Chapter 11 filing, for fear that customers will draw down lending lines and cause a run on the bank. But CIT expects to have enough creditor support to complete a prepackaged reorganization by year-end, a relatively short period for a bankruptcy case of its size.
In a move smoothing its restructuring, the company said Friday that it had persuaded billionaire investor Carl Icahn to support its prepackaged bankruptcy plan. Mr. Icahn, who wanted to push CIT into liquidation, failed to persuade other bondholders to derail CIT's restructuring plan.
With $71 billion in assets, CIT would have the fifth-largest bankruptcy filing in U.S. history, trailing only those of Lehman Brothers Holdings Inc., Washington Mutual Inc., Worldcom Inc. and General Motors Corp. CIT's Utah bank, which has about $10 billion in assets, wouldn't be part of the bankruptcy filing.
One loser from a bankruptcy would be the U.S. Treasury. Late last year it injected $2.3 billion of funds from the Troubled Asset Relief Program to help stabilize the lender, which was weighed down by billions of dollars of bad student loans and subprime mortgages. The government investment is likely to be wiped out, said people familiar with the matter. Common shares would likely drop to zero, too, these people said.
(Excerpt) Read more at online.wsj.com ...
They saw GM and Chrysler skin the tax payers, so why wouldn’t they try it. Damn those lousy republicans that voted for tarp..
We’ve heard of the gang that couldn’t shoot straight.
The Obamalloons are still trying to figure out which way the bullets go in.
I thought Icahn recently invested $1b in CIT to help them through restructuring?
TARP would have passed without Rep votes.
I wish these reports would say something like “The $2.3 billion in taxpayer money from the state of . . .”, or, “$2.3 billion - all the taxes paid by the people of . . . .[city or state) have been lost”, etc. People read $2.3 billion as just another cipher. Individualize that loss and they may pay more attention.
In these days of computerized everything, it should be fairly simple to get a breakdown of taxes paid without breaching anybody’s privacy. Hell, suppose they said that all the taxes paid by the people whose last names began with “K” (for instance) had been lost. I suspect a lot of “K”s would start to raise Hell.
Some Conservative politician ought to start describing this financial hemorrhage this way - bet he’d upset a bunch in Washington with this approach, let alone the sheep who have been sheared.
Since it did not and I have no control of how liberals vote, my concern is how the side that is suppose to represent me votes. Assumptions are not facts.
government does not protect the folks....tell O
Can’t someone file a breach of promise lawsuit here?
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