OF2-11/02/09 7:25 AM
CHAPTER 11 WOES FOR KEY RETAIL LENDER CIT.
The Osgood File. I'm Chares Osgood.
Yesterday, after months of struggling to avoid collapse, CIT Group filed for bankruptcy protection. That is bad news for small business.
SOT - Howard Davidowitz, retail consultant
"CIT is the biggest small-business lender." (:04)
Or they were, anyway. But like so many companies, CIT lost its way in recent years, says retail consultant Howard Davidowitz.
SOT - Howard Davidowitz
"This is another one of these financial institutions that took tremendous risk, destroyed themselves. The government won't put in any more money --- they're already put in two-and-a-half billion, they won't put in any more..." (:13)
More after this...
((( SPOT )))
CIT, as it once operated, was a boon to small retailers who were in need of credit.
But something happened along the way, says Jill Schlesinger, editor-at-large of CBS MoneyWatch.Com.
SOT - Jill Schlesinger, editor-at-large of CBS MoneyWatch.Com
"CIT got into the same credit crunch that has affected so many of our financial institutions. And frankly, CIT got out of the business of extending credit to the types of companies that it had been doing business with --- small businesses, a lot of small retailers --- and really extended itself into some of the more 'exotic' areas, and lending money probably to some start-ups and some borrowers that they shouldn't have lent money to..." (:26)
Schlesinger says the 2.3 billion taxpayer dollars extended to CIT is likely to vanish altogether, or get pennies on the dollar. On the other hand, she says...
SOT - Jill Schlesinger
"They could survive. Listen, if you go into bankruptcy and you strip away all those payments, you can survive once you get out of from under all the debt that's piling in on you..." (:11)
The Osgood File. Charles Osgood on the CBS Radio Network.
The Osgood File. November 2nd, 2009. |
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