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Nov 3, 2009
via Entrepreneurial

CIT bankruptcy could have domino effect

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Small and medium-sized businesses are wild with concern that the bankruptcy filing of CIT Group will cut off the financing they use to pay employees and creditors, according to an attorney who has many apparel and retail businesses among his clients.”My phone has not stopped ringing,” said Jerry Reisman, a partner at law firm Reisman, Peirez and Reisman in Garden City, New York. Reisman said he represents 21 groups that depend on CIT for factoring and other financing. He also represents an additional four parties that have applied to CIT for new business financing.”People were astonished. They don’t know what to do,” said Riesman, who took more than 10 calls during Sunday’s baseball World Series game and at least 10 more on Monday morning before 10 am EST.”They have to make payroll this week — they don’t know whether they will be able to meet obligations for payroll or for suppliers.”One of the biggest concerns is so-called antecedent debt, which refers to checks from CIT that its clients have received in the past 90 days, said Reisman.”Any money received from CIT in payment of antecedent debt is considered a preference, and, under the bankruptcy code, has to be returned to CIT,” he said. “It could cause my clients to have to file bankruptcy. This could have a staggering domino effect. It’s going to be devastating. It will destroy their own businesses.”Reisman said his firm is trying to find other sources of financing for his clients. “But now the problem is, some of them don’t qualify because credit markets have tightened,” he said. “They don’t qualify for financing from other lenders.”Dunkin Donuts franchisees are particularly concerned, said Reisman.”I also have as clients people who want to purchase Dunkin Donuts franchises, who have applications for financing pending. CIT has been the lender of choice, and we’re not sure if CIT will be able to fund the acquisitions,” he said.How will CIT’s bankruptcy affect your business? Post your comments below:

Oct 26, 2009

Examiner to be appointed for Lyondell-judge

NEW YORK, Oct 26 (Reuters) – The judge overseeing the
bankruptcy of chemicals maker Lyondell Chemical Co [ACCELC.UL]
approved a motion to appoint an examiner to review a portion of
the company’s reorganization.”

The decision, announced on Monday, was in response to the
request by Lyondell’s official committee of unsecured
creditors, who said the company had “lost sight of its
fiduciary responsibility” to all of the company’s creditors.

Oct 19, 2009

SAS CEO sees jobless recovery

CARY, North Carolina (Reuters) – The improving U.S. economy is unlikely to create many new jobs, leading to a so-called jobless recovery, said the head of software maker SAS in an interview on Thursday.

James Goodnight, chief executive officer of the privately held, business analytics software maker said the United States is doing a poor job of training new engineers and scientists.

Oct 16, 2009

Corporate America worried about sinking dollar

CARY, North Carolina (Reuters) – Chief executives from the biggest U.S. corporations worry that the slumping dollar could sap U.S. credibility around the globe, spur inflation and ultimately undermine the economy.

The dollar has fallen to a 14-month low; and while a weaker dollar makes U.S. products cheaper overseas, chief executives gathered for the Business Council meeting in Cary, North Carolina, expressed deep concern that the anemic dollar signals serious jitters.

Oct 16, 2009

Office Depot CEO worried about small U.S. businesses

CARY, North Carolina (Reuters) – The U.S. economic recovery will be slower than in past recessions because small businesses are still having a very difficult time obtaining lines of credit, said the head of office supply chain Office Depot Inc <ODP.N> on Thursday.

“If you look at every small business, they almost always took out a second mortgage on their house, or (tapped) home equity lines of credit. But in this economic disaster it’s been all about housing-led economic downfall, so those lines of cash are not available for small businesses,” said Office Depot chief executive officer Steve Odland. “We’re very pessimistic about the chances for a big bounce recovery.”

Oct 15, 2009

Executives say business conditions improving

CARY, North Carolina (Reuters) – Top U.S. executives are becoming more hopeful about the global economy and the U.S. business outlook, according to a survey of business leaders released on Thursday.

More than 60 percent of corporate leaders surveyed by the Business Council in October now expect conditions in their own industry to improve over the next six months. In contrast, almost 90 percent of those surveyed in February said conditions were worsening.

Oct 15, 2009

U.S. executives say business conditions improving

, Oct 15 (Reuters) – Top U.S. executives are
becoming more hopeful about the global economy and the U.S.
business outlook, according to a survey of business leaders
released on Thursday.

More than 60 percent of corporate leaders surveyed by the
Business Council in October now expect conditions in their own
industry to improve over the next six months. In contrast,
almost 90 percent of those surveyed in February said conditions
were worsening.

Oct 15, 2009

U.S. execs say business conditions should improve

, Oct 15 (Reuters) – Top U.S. executives are
becoming more hopeful about the global economy and the U.S.
business outlook, according to a survey of business leaders
released on Thursday.

More than 60 percent of corporate leaders surveyed by the
Business Council in October now expect conditions in their own
industry to improve over the next six months. In contrast,
almost 90 percent of those surveyed in February said conditions
were worsening.

Oct 5, 2009

No more $19 doughnuts; More businesses to fail

NEW YORK (Reuters) – Bankruptcy professionals have a grim view on the U.S. corporate recovery, despite a recent rise in stocks and an uptick in business deals.

“I think it’s going to be a sad holiday season,” said Lynn Tilton, chief executive officer of Patriarch Partners, a private equity firm that specializes in distressed companies.

Oct 1, 2009

Obama auto plan stopped global auto collapse: exec

NEW YORK (Reuters) – The global auto industry would have collapsed if the U.S. government had not provided taxpayer-backed financing for automakers General Motors and Chrysler, according to the chief executive officer of Motors Liquidation Co <MTLQQ.PK>.

“If GM had gone down, the world’s supply base would have gone down,” said Al Koch, speaking at the Reuters Restructuring Summit in New York. Koch was GM’s chief restructuring officer during the bankruptcy and now heads the GM unit that is being liquidated.

    • About Chelsea

      "Chelsea Emery joined Reuters in 2001. She wrote the daily stock market story during the dot.com era. She then moved to the aerospace desk to follow defense contractors during the Iraq war. When the U.S. economy began to crumble in 2008, Emery reported on corporate bankruptcy and restructuring for companies including Lehman Brothers and General Motors. While currently an editor, Emery continues to write chef and author profiles for the Reuters Life! wire. Emery is originally from Oregon. She has lived in Japan, Ireland and Hong Kong. She speaks Japanese and Spanish."
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