CIT Group seeks judge's OK on bankruptcy exit plan
By: Reuters | 08 Dec 2009 | 11:39 AM ET
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By Emily Chasan
NEW YORK (Reuters) - U.S. small business lender CIT Group Inc headed to court on Tuesday to ask a New York bankruptcy judge for approval of its prepackaged reorganization plan.
The company, which filed for bankruptcy just weeks ago on November 1, is asking Judge Allan Gropper to approve the plan, which would pave the way for the company to exit bankruptcy protection.
"We think our plan has, in fact, satisfied the conditions for approval," Gregg Galardi, an attorney at Skadden Arps Slate Meagher & Flom representing CIT, said at the beginning of a court hearing on Tuesday.
CIT, which filed one of the five largest bankruptcies in U.S. history after a debt exchange offer failed, is hoping to reduce its debt by $10 billion under the reorganization plan.
The company has said it has won support from bondholders "substantially in excess" of the minimum amount required under U.S. bankruptcy law.
Hundreds of thousands of small- and mid-sized businesses depend on CIT for financing, and company lawyers have said CIT must try to get through bankruptcy quickly to avoid customer defections.
Under the proposed reorganization plan, unsecured debtholders are to receive 70 cents on the dollar of new notes plus new common stock.
The case is In re: CIT Group Inc, U.S. Bankruptcy Court, Southern District of New York, No. 09-16565.
(Reporting by Emily Chasan, editing by Matthew Lewis)
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