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CIT Group’s $500 Million Loan Agreement Is Approved (Update1)
Share Business ExchangeTwitterFacebook| Email | Print | A A A By Christopher Scinta
Nov. 23 (Bloomberg) -- CIT Group Inc., the bankrupt 101- year-old commercial lender, won court approval to borrow as much as $500 million to issue letters of credit that guarantee its debt.
U.S. Bankruptcy Judge Allan Gropper in Manhattan today granted CIT’s request to approve the loan from a group of lenders led by Bank of America Corp. Gropper approved interim borrowing of $125 million on the loan earlier this month.
Gropper also approved New York-based CIT’s retention of law firms and consultants including Sullivan & Cromwell LLP and Evercore Partners Inc. None of CIT’s requests were opposed by creditors.
CIT filed for bankruptcy Nov. 1, blaming losses on subprime mortgages and tightening credit markets. CIT listed $71 billion in assets and $64.9 billion in debt. The government probably won’t recover much, if any, of the $2.3 billion in taxpayer money that went to a bailout of CIT, and shareholders will be wiped out, according to CIT’s plan.
The lender, which funds about 1 million businesses, plans to exit court protection next month. None of CIT’s operating units, including CIT Bank, were included in the filing.
All of the CIT creditors that voted accepted the company’s prepackaged bankruptcy plan, lawyer Gregg Galardi of Skadden Arps Slate Meagher & Flom LLP told Gropper.
The case is In re CIT Group Inc., 09-16565, U.S. Bankruptcy Court for the Southern District of New York (Manhattan).
To contact the reporter on this story: Christopher Scinta in New York bankruptcy court at cscinta@bloomberg.net.
Last Updated: November 23, 2009 15:40 EST
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