Just over a month after filing for Chapter 11 bankruptcy protection, CIT Group Inc. announced Tuesday that a judge approved its reorganization plan and the small and mid-size business lender will emerge from bankruptcy protection this Thursday.
CIT Group, which is based in New York, received pre-approval of a bankruptcy restructuring plan from shareholders back in October. The lender made the move as a precaution during its debt restructuring efforts.
Though CIT was able to swap out a large portion of its debt, it could not sway the majority of its bondholders to tender their securities in return for equity in the company. At that point the lender moved forward with bankruptcy, which was filed on November 1.
“CIT’s successful emergence establishes a strong foundation for the future of the Company,” said Jeffrey M. Peek, Chairman and CEO, in a company press release. “As a result of the overwhelming support for our Plan, CIT now has a stronger capital structure and improved liquidity profile.
The lender said upon its emergence from bankruptcy it will commit $500 million to support its Small Business Lending group that will aid in guaranteeing loans in the 504 and 7a lending programs, both of which are government based programs. CIT also plans to provide $1 billion toward its Vendor Financing operating segment
“CIT’s market-leading positions are derived from our strong relationships with one million small business and middle market customers,” Peek added. “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.
CIT Group has provided operating and investment capital to small and mid-sized businesses for more than 100 years. More than 90 million jobs are provided by small and mid-sized business across the United States.
