CIT reorganization plan confirmed by court
CIT Group Inc., a leading provider of financing to small businesses and middle market companies for more than 100 years, announced On Dec. 8, 2009 that its prepackaged plan of reorganization was confirmed by the United States Bankruptcy Court for the Southern District of New York, according to a news release from CIT.
CIT also indicated that it anticipates emerging from bankruptcy on Dec. 10, 2009.
“CIT’s successful emergence establishes a strong foundation for the future of the company,” said Jeffrey M. Peek, chairman and chief executive officer. “As a result of the overwhelming support for our Plan, CIT now has a stronger capital structure and improved liquidity profile. Our board of directors and management team now has the time and flexibility to execute the balance of CIT’s restructuring strategy, including maximizing the value of its existing assets and optimizing the business model.
Implementation of the plan reduces CIT’s total debt by approximately $10.5 billion while deferring debt maturities for three years and also enhances capital ratios to levels that exceed regulatory requirements. With its strengthened financial position, CIT will now focus on its business restructuring and the execution of a smooth leadership transition.
“CIT’s market-leading positions are derived from our strong relationships with one million small business and middle market customers,” said Peek. “We are committed to continue lending to these vital sectors, which will help support much needed job creation and contribute to the recovery of the U.S. economy. I am extremely grateful to our employees for their continued commitment to preserving the value of our franchise. Additionally, I would like to thank our customers for their unwavering support and our regulators for their guidance throughout this process.”
CIT continues to make progress on the reconstitution of its board of directors. Ultimately, CIT’s new board will consist of 13 directors, including seven new independent directors identified by CIT’s debtholders, five continuing directors and the new chief executive officer of CIT.
CIT has engaged Spencer Stuart, an internationally recognized search firm, to assist in identifying, interviewing and selecting the Lender Steering Committee director nominees. The search for a new chief executive officer continues.
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