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CIT Files for Bankruptcy (received 2.3 billion in bailout money)
NYT ^

Posted on 11/01/2009 1:59:46 PM PST by Chet 99

Update | 3:46 p.m. Three months ago, the CIT Group barely averted what it considered to be a ruinous bankruptcy filing that would likely have put the 101-year-old lender out of business.

On Sunday afternoon, the company filed for Chapter 11 — but under a so-called prepackaged bankruptcy plan that will enable it to emerge from court protection by the end of the year, under the control of its debtholders. (Read the filing after the jump.)

The filing, made in a Manhattan federal court, will still mean much pain for many parties, beginning with taxpayers. CIT received $2.3 billion in government aid last year, a bailout that came in the form of preferred stock. That will almost certainly be wiped out in the bankruptcy process, the first realized loss in the government’s rescue of the financial system.

(Excerpt) Read more at dealbook.blogs.nytimes.com ...


TOPICS: Breaking News; Business/Economy
KEYWORDS: bailouts; bankruptcy; cit; citgroup
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To: GOPJ

no idea, but CIT has been in death throes for weeks now.


101 posted on 11/01/2009 11:04:46 PM PST by WoofDog123
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To: Mike Darancette

“At least CIT can escape the clutches of Obama now”

entering the government structure known as “bankruptcy protection from forced liquidation by the people who own the company” accomplishes the exact opposite.


102 posted on 11/01/2009 11:51:54 PM PST by skipper18
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To: John W

Yes, big SARC.


103 posted on 11/02/2009 2:48:13 AM PST by Ghost of Philip Marlowe (I'd rather be a teabagger than an ankle-grabber.)
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To: Gondring; Chet 99
I’m hoping BoA has to sell shares and will pay back bailout

BoA is chomping at the bit to repay TARP, they have been waiting for the government to allow them to repay it for some time -
BofA prepares for TARP payoff - NYP, 2009 October 31, by Kaja Whitehouse :

Quite different from the picture that's regularly being painted. Now, Citigroup is in a bad bind, but that's quite a different story - CIT Group has absolutely no relationship with Citigroup.

CIT's prepackaged bankruptcy filing has been expected for days, if not weeks, the only question was how much the bondholders, particularly Carl Icahn, are going to get and on what terms. Hardly panic-worthy:

Icahn ends CIT battle - NYP, 2009 October 31, by Josh Kosman:

Timeline of preparation for filing, in reverse :

CIT Board of Directors Approves Proceeding with Prepackaged Plan of Reorganization with Overwhelming Support of Debtholders - November 01, 2009 15:39ET

CIT Enters into Restructuring Plan Support Agreement with Carl Icahn and Obtains Incremental $1 Billion Committed Line of Credit from Icahn Capital LP - October 30, 2009 13:18ET

CIT Obtains Additional $4.5 Billion in Financing Through Expansion of Existing Secured Credit Facility - October 28, 2009 13:12ET

If there is a sell-off in the markets tomorrow, it should in no way be in response to CIT Group's bankruptcy restructuring which has been telegraphed for weeks. I wish GM and Chrysler did similar thing before President Bush used TARP funds to bail out UAW and give unions and government a huge stake in auto companies.
104 posted on 11/02/2009 3:20:14 AM PST by CutePuppy (If you don't ask the right questions you may not get the right answers)
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To: CutePuppy

No doubt a selloff in the market will be due to both fundamental and technical reasons of the general market and the international market which sold off again.


105 posted on 11/02/2009 3:31:32 AM PST by rbmillerjr (It's us against them...the Establishment RINOs vs rank and file...Sarah Palin or bust)
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To: A.Hun

If the loan to a small business is a good investment, why won’t the money be there?


106 posted on 11/02/2009 3:45:27 AM PST by Mark was here (The earth is bipolar. ---- "OBAMA: THE GREAT MISTAKE OF 2008")
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To: Mark was here
If the loan to a small business is a good investment, why won’t the money be there?

There simply is not much money to loan. Because of the massive losses of so many banking institutions, they have raised the amount of cash reserves (in some cases mandated by the feds) they hold. Credit requirements have been tightened so much that traditionally credit worthy firms no longer qualify.

The only real money loaned currently is federal, and there isn't nearly enough of it around.

107 posted on 11/02/2009 4:03:39 AM PST by A.Hun (Common sense is no longer common.)
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To: EGPWS
Idiotic holders of such credit cards toting those rates who expect taxpayers and "the rich" to take care of them because of their complacent idiocy.

I think he speaks of raising rates on people who pay on time, etc.

108 posted on 11/02/2009 4:49:42 AM PST by GUNGAGALUNGA
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To: unkus
GE also has a LOT to gain by Death Care “reform”.

And cap and trade.

109 posted on 11/02/2009 6:58:42 AM PST by 3catsanadog (If healthcare reform is passed, 41 years old will be the new 65 YO.)
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To: rbmillerjr
"C has been raising rates on people, `due to current economic conditions.' Not risky credit customers."

CC companies charge high rates --- 27% you mentioned ONLY the risky customers, namely, those that have failed to pay on time.

"Due a youtube search and a google search to see what’s going on."

People whose knowledge is derived only from Internet searches should not be laughing at other people. Open a book on finance --- any book --- before you continue to spew nonsense:

"The calculations you present are only relevant for poorly managed financial companies...CC companies can’t pick deselect risky credit card users. They can do this. But they haven’t, so now they are punishing good customers by raising rates to ridiculous rates...not 7,9, 11,,,,not even 14 but 27%."

You know, that these statements are silly you could've learned even on the Internet. Apparently, even that you refuse to do thoroughly.

I've got nothing more to add. Have a good day.

110 posted on 11/02/2009 8:00:11 AM PST by TopQuark
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To: TopQuark

Open a book on Finance for that simple and irrelevant calculation that you did?

Funny.


111 posted on 11/02/2009 8:59:45 AM PST by rbmillerjr (It's us against them...the Establishment RINOs vs rank and file...Sarah Palin or bust)
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To: rbmillerjr
"Open a book on Finance for that simple and irrelevant calculation that you did?"

An appeal to nebulous authority! ;o)

112 posted on 11/02/2009 9:03:18 AM PST by editor-surveyor (The beginning of the O'Bomb-a administration looks a lot like the end of the Nixon administration)
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To: All

FYI on C from the recent financial article in the Times:

“As a result, the government has handed Citigroup $45 billion under the Troubled Asset Relief Program over the last year. Through the Federal Deposit Insurance Corporation, a major bank regulator, the government has also agreed to back roughly $300 billion in soured assets that sit on Citigroup’s books. Even as other troubled institutions recently curtailed their use of another F.D.I.C. program that backs new debt issued by banks, Citigroup has continued to tap the arrangement.

Citigroup is also one of only two TARP recipients so desperate for capital that they’ve swapped government-issued shares into common stock, diluting existing shareholders. (GMAC, the troubled auto lender that may receive another government infusion, is the other.) “


113 posted on 11/02/2009 9:07:10 AM PST by rbmillerjr (It's us against them...the Establishment RINOs vs rank and file...Sarah Palin or bust)
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To: rbmillerjr
"Open a book on Finance for that simple and irrelevant calculation that you did? Funny."

Of course not. I am sorry to see you read my post so carelessly.

I stated quite clearly that the calculation was easy and did not mention any book in that context. If you made that calculation at least once in your life, then that alone, even without reading, would preclude some of the silly things in your post.

I suggested that you may want to read something on the subject before arriving at conclusions and making claims. At the present time, almost every statement you make is unamnbiguously wrong and simply screams that you have not a clue about matters on which you pass judgment.

Have a good day.

114 posted on 11/02/2009 9:17:17 AM PST by TopQuark
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To: TopQuark

Fairly condescending considering you have absolutely no clue about what you are talking about.

My guess is numbers cruncher at a bank.

Your calculation is sophomoric. It attempts to rationalize 40% interest rates due to the banks making poor judgements on credit risk customers. The reality is that they should be out of business, excepting the taxpayers bailing them out.


115 posted on 11/02/2009 9:37:09 AM PST by rbmillerjr (It's us against them...the Establishment RINOs vs rank and file...Sarah Palin or bust)
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To: spokeshave
Small businesses...generating approx 70% of job growth in a normal (non-0bambi) economy and major CIT clients will take another hit.

The ONLY way to get real job growth is to reduce tax on small businesses.

116 posted on 11/02/2009 1:54:54 PM PST by alrea
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To: TexasFreeper2009
"blew through 2.3 billion.. and STILL went out of business!"

That just goes to show ya, 'a dollar dosen't go as far these days as it used to'

It just makes me fell all warm and fuzzy to know the same group might be in charge of the nations health care. I bet you feel the same.

117 posted on 11/02/2009 2:48:39 PM PST by An Old Man (Use it up, Wear it out, Make it do, or Do without.)
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