Miracle worker wanted at CIT

October 13, 2009

CIT Chief Executive Officer Jeffrey Peek plans to retire at the end of the year, but the company could well be bankrupt before it concludes its search for a replacement.

Dan Wilchins and Paritosh Bansal report that bondholders are showing little interest in exchanging their debt for equity in the troubled lender to small- and medium-sized businesses. Earlier this month it said it was looking for investors to approve a large debt exchange that would reduce its borrowings, or to approve a prepackaged bankruptcy. CIT listed $71 billion of assets on its balance sheet as of the end of June.

Peek, formerly an executive at Merrill Lynch,┬áhas led CIT since 2003. He has been widely criticized for being slow to recognize the extent to which the credit crunch would stress the company’s business model by lifting its borrowing costs. If a white knight is anywhere in sight, he better have something more convincing to sell bondholders than green shoots and the promise of a better tomorrow, as about $3 billion of debt comes due in the fourth quarter.

Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see