October 29th, 2009 by Reed Allmand 
According to an article in the Star-Telegram, CIT Group Inc., is asking bondholders to approve a prepackaged reorganization plan in case it is forced to file for Chapter 11 bankruptcy protection.
The article said.
“The troubled New York-based lender had launched the restructuring effort Oct. 1 with the hope that it will trim at least $5.7 billion from its near-term debt.”
CIT Group, which has received $2.3 billion in federal bailout money last fall and a $3 billion emergency loan in July from some of its largest bondholders has been at risk for bankruptcy since the credit crunch began and its borrowing costs have become larger than its income.
A CIT Group bankruptcy could have devastating effects on the retail industry which depends heavily on credit provided by this company. If CIT Group is not able to find buyers for its loans during a bankruptcy, the company’s current borrowers might be forced to find financing elsewhere which could prove nearly impossible. Many retailers are jittery, some even considering using as much of their credit lines as possible which could in affect put more pressure on this nearly bankrupt lender.
About Reed Allmand
Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."
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