CIT May File Bankruptcy

CIT Group plans to file for bankruptcy in New York as soon as Sunday night or early Monday. CIT is poised to enter bankruptcy with enough creditor support to approve its reorganization plan and shorten its stay in Chapter 11. CIT Group and Carl Icahn have reached a tentative deal that could end a recent feud over the lender’s restructuring plan, said people familiar with the matter. CIT has agreed to accept $1 billion in backup financing from Icahn, which it would tap if it needs more than $4.5 billion it recently received from other bondholders. CIT stock was halted on the...

“5 Minute Capital” Podcast with CIT

As reported by CA Apparel News. Retailers are responding to the recession by keeping inventories lean, renegotiating their leases, and using technology to boost efficiency and maintain cash flow. That was the word from New York-based financial-services company CIT Group Inc., which recently held its “5 Minute Capital” podcast featuring senior CIT executives discussing market conditions and middle-market trends. The most recent podcast included Burt Feinberg, group head of CIT Retail Finance, discussing the results of a recent retail survey released by CIT and Forbes Insights. To listen to the podcast, visit...

CIT Group Again in Dire Straits

Commercial lender CIT Group is again on the brink of bankruptcy as it seeks to craft an exchange that would cut its debt and offer bondholders an equity stake in the company. CIT is preparing an exchange offer that would eliminate as much as 40% of its more than $30 billion in outstanding debt, the Wall Street Journal said, citing anonymous sources. The exchange would hand control of the company over to its bondholders and wipe out common stockholders, according to the report. The Journal added that if the debt exchange with key bondholders fails, CIT Group would seek bankruptcy protection in order to restructure its operations. CIT spent the summer trying to stave off a potential collapse amid mounting loan losses and rising funding costs. It received $2.3 billion in federal bailout aid last fall, a $3 billion emergency loan in July from some of its largest bondholders and completed a debt repurchase program in August to help ease its cash crunch. Those measures, however, may not be enough. The company has said it needs to continue to reduce its debt burden to survive. CIT serves as a short term financier to about 2,000 vendors that supply merchandise to about 300,000 stores, according to the National Retail Federation. Analysts have said 60% of the apparel industry depends on CIT for...

Who is CIT and what do they mean in our industry?

Label Networks put out one of the more informative articles I have seen on who CIT is and what impact if any they have on action sport retail? Thanks Kathleen and friends! So much can happen in a week. Or rather, 10 days. On July 12th news broke that CIT Group Inc., a major bank loan supplier to over a million small to mid-sized retailers and suppliers particularly focused in the fashion industry, was about to run out of money. CIT, which some estimate controls 60% of the apparel factoring market, was on the brink of filing for bankruptcy. On July 15th, the New York Stock Exchange halted trading on shares of CIT. In a combined effort, the National Retail Federation, American Apparel & Footwear Association, Council of Fashion Designers of America, and the National Counsel of Textile Organizations, among others, sent letters to Congress asking for bailout funds for CIT. However CIT was denied a bailout because it was deemed by the decision-makers doling out the bank bailout funds that CIT was not too big to fail. What this meant for suppliers and retailers over the last week was a major panic that they would soon have to shut their doors, which in essence would be detrimental to the fashion and retail industry in the United States. To back up a bit, CIT supplies what’s called “factors” or loans, many of them to businesses in fashion. Factoring are loans that keeps businesses afloat while waiting for sales. So basically, stores make orders and pay off these orders as sales of the items begin, but in the meantime, they...