\t\t\t\tMany investors were told that investing in CIT preferred stock and bonds was safe and appropriate for them. Some sales pitches were based on the $2.3 billion government bailout of CIT. This is just another example of material misrepresentations and omissions in the sale of fixed income products, which have become rampant on Wall Street. <\/p>\n
There are some reports that misrepresentations were made to sell CIT securities to smaller institutions and individuals even as Wall Street and large institutions were unloading their own holdings of CIT. This is similar to claims made concerning the sales of auction-rate securities and recommendations prior to the Lehman, Fannie Mae, and Freddie Mac debacles. <\/p>\n
This week, the 101-year-old commercial lender announced that it is filing for bankruptcy in an attempt to get rid of $10 billion in debt. Not only has CIT run out of funding, but also a US bailout and debt exchange offer faltered. <\/p>\n
CIT says it will continue to stay in business and that bankruptcy will allow the commercial lender to keep providing funding to middle-market and small business clients. <\/p>\n
With $64.9 billion in debt and assets valued at $71 billion, it is unlikely that the government will recover a lot of the $2.3 billion in taxpayer money that the commercial lender received under the Troubled Asset Relief Program.<\/p>\n
CIT says bondholder support will allow it to get out of bankruptcy pretty quickly-two months is its current estimate. A prepackaged bankruptcy plan has been approved.<\/p>\n
CIT’s prepackaged plan outline stated that majority of noteholders would get new notes at 70 cents on the dollar in addition to new common stock.<\/p>\n
CIT is the country’s biggest lender to mid-sized and small businesses. CIT funds some 1 million businesses. It is the number one aircraft financier and the number three biggest US railcar-leasing firm. CIT finances trades in North America, Europe, and Asia. <\/p>\n
Related Web Resources:<\/strong> Many investors were told that investing in CIT preferred stock and bonds was safe and appropriate for them. Some sales pitches were based on the $2.3 billion government bailout of CIT. This is just another example of material misrepresentations and omissions in the sale of fixed income products, which have become rampant on Wall Street. […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[3907,3908,3738],"tags":[],"class_list":["post-596","post","type-post","status-publish","format-standard","hentry","category-cit-group","category-commercial-lenders","category-investor-fraud"],"yoast_head":"\n
\nCIT Files Bankruptcy; U.S. Unlikely to Recoup Money<\/a>, Bloomberg.com, Nov 1, 2009
\nLender CIT files for bankruptcy<\/a>, Portland Business Journal, November 2, 2009
\nTroubled Asset Relief Program<\/a>, Federal Reserve
\nChapter 11 Bankruptcy
\n Continue Reading \u203a<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"