Reuters - CIT Group says bankruptcy plan wins wide support
On 10:50 am EST, Thursday November 19, 2009
NEW YORK (Reuters) - CIT Group Inc (Other OTC:CITGQ.PK - News) on Thursday said it has won overwhelming support from bondholders for its reorganization plan, as the big finance company tries to emerge from bankruptcy by the end of the year.
The New York-based company said it was won "substantially in excess" of the minimum support needed under U.S. bankruptcy law to restructure from all classes of bondholders eligible to vote on its "prepackaged" Chapter 11 plan.
CIT on November 1 filed one of the five largest bankruptcies in U.S. history, hoping to reduce debt by $10 billion.
Hundreds of thousands of small- and mid-sized businesses depend on CIT for financing, and company lawyers have said CIT has a "need for speed" in getting through bankruptcy on concern that many customers could defect if the process drags on.
CIT said holders of 83 percent of its debt took part in the approval process for its reorganization plan, and holders of 92 percent of outstanding principal supported the plan.
U.S. Bankruptcy Judge Allan Gropper is scheduled at a December 8 hearing to consider whether to approve the plan, which calls for unsecured debtholders to receive 70 cents on the dollar of new notes plus new common stock.
CIT said some noteholders who did not vote for the plan will have until December 4 to accept notes and stock in exchange for their holdings, on the same terms as other noteholders who voted in favor of its Chapter 11 plan.
On Monday, CIT posted a $1.07 billion third-quarter loss, in part because the company more than tripled the amount it set aside for credit losses from a year earlier.
The 101-year-old company ended September with $69.19 billion of assets ant $64.07 billion of liabilities.
CIT shares fell 0.4 cents to 19.6 cents in morning trading on the Pink Sheets.
The case is In re CIT Group Inc, U.S. Bankruptcy Court, Southern District of New York, No. 09-16565.
(Reporting by Jonathan Stempel, editing by Dave Zimmerman)
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