CIT Group Inc.'s board of directors, in what would be among the biggest corporate bankruptcies ever, said Sunday it has approved the filing of a prepackaged reorganization plan. The formal filing in U.S. Bankruptcy Court was expected to follow within hours. CIT, a major lender to small and midsize businesses, has struggled to avoid collapse since the recession triggered billions of dollars in loan losses and the financial crisis cut the company off from its main source of financing. "The decision to proceed with our plan of reorganization will allow CIT to continue to provide funding to our small business and middle market customers, two sectors that remain vitally important to the U.S. economy," Chairman and CEO Jeffrey M. Peek said in a statement.
With roughly $60 billion in assets, CIT's filing is probably the fourth-largest bankruptcy in U.S. history, ranking between General Motors and Enron. The bankruptcy of Lehman Brothers, which collapsed last year, was the biggest.
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