WASHINGTON — After struggling for months to avert bankruptcy, lender CIT Group filed for Chapter 11 protection on Sunday in an attempt to restructure its debt while trying to keep badly needed loans flowing to thousands of mid-sized and small businesses.
CIT made the filing after a debt-exchange offer to bondholders failed. CIT said in a statement that its bondholders overwhelmingly opted for a prepackaged reorganization plan, which will reduce total debt by $10 billion while allowing the company to continue to do business.
CIT said Sunday the bankruptcy filing is only for the holding company, and won’t affect its operating subsidiaries, such as Utah-based CIT Bank.
The Chapter 11 filing is one of the biggest in U.S. corporate history. CIT’s bankruptcy filing shows $71 billion in finance and leasing assets against total debt of $64.9 billion.
CIT’s move will wipe out current holders of its common and preferred stock. That means the U.S. government will likely lose the $2.3 billion it sunk into CIT last year in return for preferred shares to prop up the ailing company.
11 fugitives extradited to U.S.
Mexico has extradited 11 fugitives, accused of crimes including murder, sex offenses, drug trafficking and money laundering, to face trial in the United States, the Justice Department said Sunday. Justice said Mexico has extradited a record 100 fugitives to the United States in 2009. The previous record, 95, was set in 2008.
Contractor KBR warned to cut number of workers in Iraq
Pentagon auditors are warning the Army’s primary support contractor in Iraq — responsible for such services as mail, laundry, housing and meals — to cut its work force there or face nearly $200 million in penalties for keeping thousands too many on the payroll. According to a Defense Department audit, Houston-based KBR Inc. has increased employee levels while U.S. troops steadily leave the country. As a result, the U.S. government is paying far more in labor costs in Iraq than it should. As of Sept. 1, there were 17,095 KBR employees in Iraq.
Ohio: Found bodies were female homicide victims
Six women whose decomposed bodies were found at the Cleveland home of a convicted rapist were all victims of homicide, the coroner’s office said Sunday. At least five of the women apparently had been strangled, it said, and the bodies “could have been there anywhere from weeks to months to years.” Anthony Sowell, 50, was arrested Saturday in connection with the case.
California: Military crash rescue now a recovery mission
The search for nine people missing when a U.S. Coast Guard plane collided with a Marine Corps helicopter over the Pacific Ocean is now a recovery mission, officials said Sunday. The two aircraft collided Thursday evening as the Coast Guard searched for a missing boater and the Marine helicopter participated in a nighttime training exercise.
Australia: Boat sinks
A search and rescue mission was under way today for about two dozen people missing after their boat sank in the Indian Ocean far off Australia. Merchant vessels that responded to a distress call managed to pluck 17 survivors from the water late Sunday and were searching for others, Australia’s Home Affairs Minister Brendan O’Connor said, and speculated that the boat may have been carrying asylum seekers. About 40 people were believed to be aboard the boat when it went down near the Cocos Islands.
Russia: Plane crashes; 11 die
A Russian heavy-lift military cargo plane crashed shortly after takeoff Sunday in Siberia, killing all 11 crew members on board, officials said. The four-engine Il-76 went down about a mile from the runway. The cause of the crash was unknown.
From Herald news services
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