NEW YORK - CIT Group, the bankrupt 101-year-old commercial lender, has won court approval to borrow as much as $500 million to issue letters of credit that guarantee its debt.
US Bankruptcy Judge Allan Gropper yesterday granted CIT’s request to approve the loan from a group of lenders led by Bank of America Corp. Gropper approved interim borrowing of $125 million on the loan earlier this month.
He also approved New York-based CIT’s retention of law firms and consultants, including Sullivan & Cromwell LLP and Evercore Partners Inc.
None of CIT’s requests were opposed by creditors.
CIT filed for bankruptcy protection Nov. 1, blaming losses on subprime mortgages and tightening credit markets. It listed $71 billion in assets and $64.9 billion in debt. The government probably won’t recover much, if any, of the $2.3 billion in taxpayer money that went to a bailout of CIT, and shareholders will be wiped out, according to CIT’s plan.
The lender, which funds about 1 million businesses, plans to exit court protection next month. None of CIT’s operating units, including CIT Bank, were included in the filing.
