The century-old American lender CIT Group has filed for bankruptcy, the fifth largest in the country's corporate history by assets at $71 billion.
CIT, which finances small and middle market businesses, has sought bankruptcy protection after the failure of its planned debt-exchange offer
with bondholders.
The bankruptcy, which reflects the continuing credit woes in the US economy, is the largest following that of Lehman Brothers, Washington Mutual, Worldcom and General Motors. Going by estimates, only four entities had more assets than CIT, when they went bankrupt.
According to the court filing, CIT had total assets worth $71 billion while the liabilities stood at $64.9 billion, as on June 30, 2009.
At the time of bankruptcy, Lehman had assets to the tune of $691 billion, Washington Mutual ($328 billion), World Com ($104 billion) and General Motors ($91 billion).
Interestingly, four of the five bankruptcies - Lehman, Washington Mutual, General Motors and CIT - have happened in the wake of the financial meltdown.
In a statement on Sunday, CIT said the company and one of its subsidiary, has filed for "prepackaged" reorganisation with support of its debt holders and Board's approval.
Following the reorganisation, the company expects to lower its debt by about $10 billion.
To tide over the financial meltdown, the US had pumped in billions of dollars into CIT.