CIT Group files for Chapter 11 bankruptcy

CIT Group has filed for bankruptcy as it attempts to cut $10 billion worth of debt.

The commercial lender, which provided funds to around one million different businesses, had tried to stave off making a Chapter 11 petition by announcing a debt swap last month, but lack of interest from investors led to CIT filing for bankruptcy this weekend.

More than $2 billion had been poured into the company via a US taxpayer bailout and the treasury department has admitted it is unlikely the government will be able to recover much of the money.

Bankruptcy rumors had been surrounding CIT for months as the company saw its share price drop from a 2007 high of more than $60 to close at just $0.72 last Friday.

Late last month, CIT stated its intention to expand its senior secured credit facility by an extra $4.5 billion but this was not enough to keep bankruptcy at bay.

In its filing at the US bankruptcy court over the weekend, it announced it had $71 billion in assets and $64.9 billion in liabilities.