CIT Group receives final $1 billion in financing

-- Home Textiles Today, 8/7/2009 9:20:00 AM

New York — CIT Group said Friday that it had received the final $1 billion of $3 billion in financing arranged by bondholders and said it will use a substantial amount of the funds to support small business and middle market customers.

CIT also announced that it would suspend dividend payments on its four series of preferred stock to improve liquidity and preserve capital while restructuring efforts are ongoing.

The future of the lender has been in question since negotiations with the U.S. government failed last month. Bondholders arranged for $3 billion in emergency financing.

Also today, Reuters reported that apparel maker Scherr filed a lawsuit against CIT with the aim of terminating its contract with the lender. Scherr said CIT wasn't able to guarantee it would uphold its factoring agreement.