While CIT is waiting for the remaining $1 billion dollars from its bondholders, it is now considering selling off some of its assets and bankruptcy is still a possibility. At present CIT is trying to restructure out of court. They were denied additional bailout money by the Obama administration because they could not restructure.
CIT’s corporate finance department is its largest division and in all likelihood, they will keep this division. CIT has noted that it may be difficult to make money on the aviation and railcar business. Microsoft had terminated its relationship with CIT for vendor financing, and CIT is unsure about whether they will keep this division.
There has been some interest in purchasing the bank as Warren Buffet’s company, Berkshire Hathaway and Leucadia National had offered to buy CIT in the spring, but CIT turned down the offer which was too low.
Whether or not CIT is able to restructure now in order to receive the additional $1 billion remains to be seen. However, the bondholders stand to lose money if their efforts to provide the additional financing fail because CIT fails to restructure. It would appear that the bondholders will do what they can to help CIT to protect their investment.