Last year, it celebrated its centenary.  That year, CIT group also posted a 6 billion loss.  Now it's filed for protection under Chapter 11 of the bankruptcy laws.  What do you think the significance of CIT's bankruptcy is likely to be for most investors?

Stockholers will be wiped out. Bondholders like myself apparently will recoup approximatelty 70 cents on the follwr -- but in the form of new notes with a stepped schedule of later maturity rates, a higher coupon, and some preferred shares that provide no income but do give a vote and have a high "liquidation preference value."

Al least, that's what the approximateyt 3-pound document they sent me seems to say.

I don';t look at bankruptcy filings all that often, but as I recall, in most cases the company had more liabilities than assets.  Why did CIT file when it still has more assets than liabilities?

It's pretty confusing, even to bondholders (e.g. me), and even after reading the pounds of documents they sent out in the mail.

The best I can figure out is that they had a lot of debt coming due very shortly and could not obtain the credit they needed to refinance it, as their usual sources had been drying up. The assets may not be all that liquid, as they consist mainly of longer term loans to various borrowers.

That is apparently why they are giving the bondholders new bonds with a face value of about 60-70 cents on the dollar but with somewhat longer maturities and a higher interest rate, along with some new preferred stock that pays no dividend and has no market value -- except that it takes on a high claim value in case of liquidation.