CIT Group, the lender nearing collapse under the burden of $30 billion in debt, has turned to Skadden, Arps, Slate, Meagher & Flom to negotiate a last-minute rescue deal with a group of bondholders represented by Paul, Weiss, Rifkind, Wharton & Garrison, according to sources close to the matters.
That news comes as no surprise. Skadden and Paul Weiss sat across from each other in July, when CIT negotiated the terms of an emergency $3 billion loan from its main bondholders, according to our previous reporting on the issue. That loan, on top of $2.3 billion in government bailout funds, was intended to shore up CIT’s cash base going forward, according to the AP. Those measures apparently weren’t enough, and CIT is on the verge of a deal with bondholders to cut about 40 percent of its outstanding $30 billion in debt in exchange for a significant chunk of equity, the AP reports. If that fails, CIT could file for Chapter 11 protection.
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