CIT Group prepares to emerge from bankruptcy following plan approval

By Lisa Kerner

Charlotte, N.C., Dec. 8 - CIT Group Inc. announced that it expects to emerge from bankruptcy on Thursday after its pre-packaged plan of reorganization was confirmed by the U.S. Bankruptcy Court for the Southern District of New York on Tuesday.

The plan calls for the cancellation of CIT's existing common and preferred stock along with all non-reinstated debt.

Distributions of new debt and equity securities will occur "as soon as practicable," according to a CIT news release.

CIT's new common stock will be listed on the New York Stock Exchange under the ticker symbol "CIT."

The company said it will issue 200 million shares of new common stock to eligible debtholders in exchange for their claims against the debtors.

According to CIT, the implementation of the reorganization plan reduces the company's total debt by approximately $10.5 billion, defers debt maturities for three years and enhances capital ratios to levels that exceed regulatory requirements.

CIT said its focus will now be on restructuring its business and executing a smooth leadership transition.

The company's new board of directors will consist of 13 directors, including seven new independent directors identified by CIT's debtholders, five continuing directors and the company's new chief executive officer. The search for a new CEO continues, said CIT.

"As a result of the overwhelming support for our plan, CIT now has a stronger capital structure and improved liquidity profile," chairman and CEO Jeffrey M. Peek said in the release.

"Our board of directors and management team now have 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."

CIT, a New York-based provider of financing to small businesses and middle-market companies, filed for bankruptcy on Nov. 1. Its Chapter 11 case number is 09-16565.

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