Bankruptcy Still Possible for CIT Bank

August 12, 2009

Photo by Mario Hornik

Photo by Mario Hornik

Although CIT bondholders will not push for bankruptcy, it is still possible for CIT Bank who is looking for the final $1 billion dollars by August 17, 2009 in order to pay a note that is due.

CIT is looking for ninety percent of the money in order to avoid the filing. This is a very tense situation for retailers who need factoring loans from CIT in order to buy Christmas inventory. If they do not get the loans or look for alternative financing, they may go out of business.

CIT is trying to restructure the company by selling off some of its assets. Restructuring has become a popular way for businesses to avoid bankruptcy in the economic crisis in the U. S., since refinancing is unavailable.

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