CIT Bails On $2.3B In TARP Funds, Files Prepack Ch. 11

By Nick Malinowski

Law360, New York (November 02, 2009, 6:19 PM ET) -- CIT Group Inc. has slid into Chapter 11 bankruptcy, an action that will likely cost U.S. taxpayers $2.3 billion and raises questions about the lender’s ability to continue to service a broad swath of the small business and middle-market sectors.

In a voluntary petition filed in the U.S. Bankruptcy Court for the Southern District of New York late Sunday night, CIT listed assets of $71 billion and liabilities of $65 billion, and announced debt securities held by more than 500 creditors.

Among the largest unsecured claims...
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