< Back to previous page

US lender files for Chapter 11

Published on 2 Nov 2009 under category: legal

A major US lender has filed for Chapter 11 bankruptcy protection.

CIT Group has taken this action, although its bondholders have agreed a restructuring programme which will enable the company to stay in business.

Jeffrey Peak, chief executive officer of the firm, said: "The decision to proceed with our plan of reorganisation will allow CIT to continue to provide funding to our small business and middle market customers, two sectors that remain vitally important to the US economy."

The restructuring will see many bondholders take on new debt worth around 70 per cent of their old CIT debt.

It is hoped that this will cut the company's shortfall by as much as £6 billion.

Bankruptcy has been in the news recently as former Liverpool and England footballer John Barnes moved out of insolvency last week.

Barnes had an order against him removed, which gives him until November 9th to settle his tax bill for the bankruptcy to be fully rescinded.

If you require advice on Insolvency and Bankruptcy please call us on +44 (0)20 7831 0101 and ask for Katherine Sillett.