CIT Group was a 100-year-old lender that nearly brought down US retail — Ch.11 in 2009

CIT Group was founded in 1908 in St. Louis by Henry Ittleson as the Commercial Credit and Investment Company. It financed accounts receivable at small companies — factoring — and grew into one of America's most important middle-market lenders. By the 2000s, CIT was the largest SBA lender in the US and provided financing to roughly half of all US retailers, from clothing brands to furniture chains. It employed 9,000 people and had over $80 billion in assets.

Under CEO Jeff Peek, who took over in 2003, CIT embarked on an aggressive growth strategy: assets rose 77% from 2004 to 2007 as the company acquired education lenders and subprime mortgage portfolios. These acquisitions proved disastrous. CIT reported more than $3 billion in losses over the following eight quarters as the subprime crisis unfolded. In December 2008, CIT became a bank holding company and received $2.33 billion in TARP funds, hoping to stabilize its funding.

The TARP injection was not enough. In July 2009, the FDIC rejected CIT's request for loan guarantees. Its bondholders — led by PIMCO — provided a $3 billion emergency loan on 19 July 2009 to stave off immediate collapse. A run by depositors and a loss of confidence among its commercial lending partners made bankruptcy inevitable. On 1 November 2009, CIT filed a prepackaged Chapter 11 bankruptcy in New York, with a restructuring plan already agreed by bondholders.

The prepackaged bankruptcy was swift: CIT emerged on 10 December 2009 — 40 days after filing. Bondholders exchanged their debt for equity, and existing shareholders were wiped out. CEO Jeff Peek resigned in January 2010. CIT continued operating after bankruptcy, eventually acquiring OneWest Bank in 2015 and selling its aircraft leasing business in 2017. In January 2022, CIT was acquired by First Citizens BancShares for $3.8 billion, ending its 113-year run as an independent lender.