Commercial lender CIT Group plans to ask bankruptcy court to approve its Chapter 11 exit plan at Dec. 8 hearing

Cindy Allen

NEW YORK , November 4, 2009 (Associated Press) – Commercial lender CIT Group Inc., which is operating under bankruptcy protection, said Wednesday it would ask a court to approve its prepackaged plan to exit Chapter 11 at a hearing on Dec. 8.

The company, based in New York, filed for bankruptcy protection on Nov. 1 after it had negotiated an exit plan with lenders to try to ensure a speedy exit. It had teetered on the brink of collapse for months. The company's rising costs to finance its operations outpaced the money it took in from providing loans.

CIT has already reached agreements with creditors to reduce its debt by about $10 billion. Shareholders would be wiped out under the existing reorganization plan.

CIT is one of the nation's biggest lenders to small and midsize businesses, providing financing to a large array of businesses including retailers, energy companies, a small movie studio, and operators of Dunkin' Donuts stores.

There is little hope the government will recover the $2.3 billion CIT took last fall as part of a rescue of other banks and lenders.

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