John Tamny of RealClearMarkets
Not too long ago, it was broadly assumed that mid-level lender CIT Group would go bankrupt. With its executives having staked the firm’s survival on receipt of a federal loan, the FDIC’s refusal to agree on a rescue package apparently spelled its doom.
But as often happens when individuals stare demise in the face, creativity is the result. In CIT’s case, its creditors didn’t want to risk the vagaries of bankruptcy court, while its executives probably saw a greater likelihood of unemployment if they left the firm’s fate in the hands of a judge.
