Score this one as a loss for the TARP Program: CIT Group, the ancient commercial lender bailed out late last year by the federal government and earlier this year by a group of hedge funds, has gone into bankruptcy protection.
CIT filed for bankruptcy yesterday. That’s great news for its creditors–including those hedge funds and equally-ancient corporate raider Carl Icahn, whose $1 billion will keep the firm going during its stay at Club Chapter 11. But for Tim Geithner and the Treasury Department? Less so.
The hand that feeds–CIT got more than $2.3 billion in taxpayer money to stay afloat–is getting bitten in a big way. The government will recoup little if anything under the prepackaged bankruptcy plan, which promises creditors new notes at 70 cents on the dollar and new common stock. Current common stockholders will get just 2.5% of a reorganized CIT.
“We will be following developments very closely with an eye toward protecting taxpayers during the bankruptcy proceeding,” Andrew Williams, a spokesman for the beleaguered Treasury said. But he conceded that all is basically lost, acknowledging that “recovery to preferred and common equity holders will be minimal.”
Hedge funds 1, taxpayers 0.
Icahn To Finance CIT Bankruptcy [FINalternatives]
CIT Group Files Bankruptcy, Seeks to Cut $10 Billion in Debt [Bloomberg]
CIT’s Bankruptcy May Help Bondholders and Erase Taxpayer Stake [Bloomberg]
Greg Michaels sucks
I’ve suffered under Greg Michaels. I’ve gouged out my eyeballs after reading Greg Michaels’ writing. Greg Michales was a shitheel. You, Jon Shazar, are no Greg Michaels.
I don’t see Greg’s name in the editor list on top left anymore… only Bess is there. Only Greg can get himself fired in a growing economy.
I don’t see Greg’s name in the editor list on top right anymore… only Bess is there. Only Greg can get himself fired in a growing economy.
Jon Shazar may be the gayest name ever. Homo.
Greg
@2 so then this would be a good thing, now wouldn’t it, AB?
A moment of silence for Greg.
.
Okay, back to work motherfuckers.
Hey Bess -
He was a douche. But he was our douche. Did you snuff him?
Love,
Mom
@6 – Affirmative
@7 too soon.
What was the point of that useless exercise? $2.3 billion to delay the inevitable for 3 months. What a complete waste of money.
WOW!! greg’s name is missing from the top right editors list!! OH GLORIOUS DAY!!!!
JS, unless you can combine a taste for slutty humor with endless cnbc/cg refs, and maybe, just maybe include some finance news of value, you will be wasting everyone’s fucking time.
@13
Actually I think the beat for the secondary writer on DB is a pretty tough medium. CNBC, Business Media, and juicy bits are mostly Bess’ domain (which is a good thing). Those are the best stories and the easiest to hit home runs on. Greg was never exactly a pulitzer prize winning writer either, but the niche he had was also a tougher bit to cover with humor.
Good luck to you Mr. Shazar, I hope the peanut gallery treats you well.
Greg’s writing was so bad that he inspired the “peanut gallery” to new levels… he should have been kept for that reason. The stories themselves were irrelevant.
Jon -
I named you Jon instead of John, so everyone else could hate you too.
You prick.
Love,
Mom
It looks like Shazar wrote for FINalternatives. Give him a chance I bet he’s got some great insight to add to the days news.
DING DONG THE GREG IS DEAD, THE GREG IS GREG IS GREG IS DEAD!
14 – Tough beat? I seem to recall GM tossing up gratuitous T&A shots in a post and winning plaudits from the peanuts… How many brain cells does it take to understand sex sells?
JS – Just add “… with hookers and fellow fund managers in lingerie …” to every story that Bess gives you and, bam, tenured staff writer of DB.
@19 yeah no. his writing sucked, which was the problem. he could’ve helped it a little with some T&A shots– which he rarely did– and he still would’ve been a pain to read.
16=racist.
19 – “yeah no”. Highly original writing. You must love Bess’ uninspired market musings, too.
@22 what the fuck are you talking about? you clearly are a friend of gm who came here to defend him, having never read db, or you’d know that bess does not make market musings. douchebag.
Greg is gone! Score one for Deal Breaker readers!
Jon you better stay on your toes, we are ready to rip you apart, grammatically that is….
It’s not so simple. T/A shots, “hooker-fuckers,” etc., this is Bess’ beat. She’s also set the bar so high that any copping of this line is bound to seem pretty lame. I will not miss GM but wish him well. As for John Salazar, well, whatev.
Bankruptcy is not something that you do on the spur of the moment, but rather it should be a well thought out plan that you only implement when you have exhausted all other possibilities. While bankruptcy may provide a way out of your current financial situation, you need to consider and be aware that the ramifications of filing bankruptcy are going to haunt you for the next 7 to 10 years. Many people who file bankruptcy are doing so to make things better “now” but they are not looking years down the road, and when they do and wish they had considered other options, it is then too late.