CIT Working to Strengthen Management

Photo by Lisa Gagne

Photo by Lisa Gagne

As CIT was forced to pledge most of its assets to secure a $1 billion dollar note, the company has also agreed to “strengthen its management and risk oversight, submit a plan to raise capital and fix its loan loss accounting,” reported Colin Barr, Senior Writer for Fortune in his August 13, 2009 article.

This means CIT must review the salaries of top executives to insure that their high salaries are not causing the company’s financial failure. Colin Barr also note that CEO Jeff Peek “who has made $36 million since 2004 for leading the company to the brink of bankruptcy” signed the agreement with the FDIC.

In view of the securing of financing for CIT, there are still questions as to whether CIT will be able to continue, considering the fact that CIT has made its money by “borrowing money at low rates and lending it out at higher rates.”

Retailers now have money for Christmas inventory, but some of the retailers who need this money are at risk of bankruptcy, themselves.

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