“CIT is the 600-pound gorilla in the industry,” Alouf said.
But CIT has already pulled back sharply on its lending to businesses as it tried to preserve cash. Its most recent quarterly earnings report showed the company originated just US$4.4 billion in new business during the first six months of the year, compared with US$11.3 billion in the same period last year.
CIT said on Sunday the bankruptcy filing was only for the holding company and would not affect its operating subsidiaries, such as Utah-based CIT Bank. CIT has filed a number of first-day motions to allow it to continue operations, including requests to keep paying wages and other employee benefits and to pay its vendors and certain other creditors in full.
It has retained Evercore Partners and FTI Consulting as its financial advisers and Skadden, Arps, Slate, Meagher & Flom LLP as legal counsel in connection with the restructuring plan and Chapter 11 cases.
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