US authorities said Monday they anticipate "minimal" payback on 2.33 billion dollars in bailout funds provided last year to business lender CIT Group, which filed for bankruptcy over the weekend.
Treasury spokesman Andrew Williams said officials would be following developments "with an eye toward protecting taxpayers during the bankruptcy proceeding."
But he noted that since the prepackaged bankruptcy calls for all debtholders to receive less than face value of their stakes "recovery to preferred and common equity holders will be minimal."
CIT Group, a key US lender to small and medium-sized firms, filed for Chapter 11 creditor protection Sunday, becoming the fifth largest failure in American history and dealing a new blow to market nerves.
CIT said late Sunday it has agreed a restructuring plan with creditors that will reduce its debt by about 10 billion dollars.
In July the US government rejected a fresh bailout plea from the group.
