CIT files for 5th largest US bankruptcy

Monday's trading should be interesting, CIT (NYSE:CIT) goes down for the count this weekend.  In the bankruptcy filing, CIT said it had $71 billion in assets and $64.9 billion in liabilities.  Shares of CIT will be worthless come Monday.

(CNNMoney.com) CIT said it expects the reorganization to total debt by approximately $10 billion, significantly reduce its liquidity needs over the next three years, enhance its capital ratios and accelerate its return to profitability.

CIT said an additional $4.5 billion in credit obtained Wednesday will allow it to meet the needs of its clients and continue day-to-day operations during the bankruptcy approval process. The company said it has also obtained an additional $1 billion in credit to provide supplemental liquidity.

The company also said it has filed motions in the bankruptcy court to allow for the continued payment of employees, and to allow the company to pay vendors and other creditors in full.

Common shareholders, however, will be out of luck. CIT said all existing common and preferred stock will be cancelled upon emergence from bankruptcy protection. That would likely include preferred stock from the $2.3
billion in funding from the U.S. government's Troubled Asset Relief Program (TARP) the company received in its efforts to stay afloat.

CIT shares were trading at 64 cents after hours Friday, having closing at 72 cents during regular trading hours. The stock traded above $60 as recently as 2007.

SOURCE: http://money.cnn.com/2009/11/01/news/companies/cit_group/?postversion=20...