A Rescue Plan for CIT Group?
On the heels of the announcement that the struggling CIT Group had extended the contract of its CEO Jeffrey Peek, comes news that the company (which has lost more than $5 billion over the past nine quarters and failed to win a second federal bailout from the government in order to stave off bankruptcy this summer) is negotiating a possible new credit deal of some $10 billion. According to Reuters, the new deal “could help the finance company pay off maturing debt and stave off bankruptcy…”
Another report in the New York Post indicated that hedge funder John Paulson of Paulson & Co is looking into a rescue plan for CIT that would include a merger with IndyMac Federal Bank. However, a “person familiar with the matter” dismissed that piece of news to Reuters saying it was “wrong.”
Stay tuned. CIT seems poised for a few more twist and turns as it works through its profound problems.
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