(Filed Under Financial and General Interest News). CIT Group Inc. announced today that Jeffrey M. Peek has resigned as chief executive officer of the company and chairman of the board, effective December 31st, 2009. The company’s board of directors is forming a search committee to oversee the recruitment process for his replacement.
This comes on the heels of the company’s restructuring program launched earlier this month, which it has implemented in an effort to stave off voluntary bankruptcy filing. The company has been particularly hard-hit by the economic recession, and has posted billions in losses due to borrowing costs outpacing the funds it generates from lending to customers, according to an October 13th article in the Associated Press. As a result, the company has fallen behind on loan repayments.
According to an article in Bloomberg dated July 14th, 2009, Peek joined CIT after failing to get the top job at Merrill Lynch & Co. Bloomberg reported that Peek implemented subprime mortgages and student loans—those loans largely responsible for the collapse of the economy—to boost growth, which instead pushed it further into debt once the crisis hit and customers were unable to make loan payments. As of the July 14th article, CIT had reported losses in the previous eight consecutive quarters totaling at more than $3 billion.
Peek commented about the restructuring plan and his decision to resign; “CIT’s recently launched restructuring plan is designed to enhance its capital levels, bolster liquidity and return the company to profitability.
“By strengthening CIT’s financial position, the company will advance its bankcentric model and invigorate its market-leading franchises which support the small business and middle market sectors of the economy. Now is the appropriate time to focus on a transition of leadership, and I look forward to working closely with our Board during that process.”
Peek joined CIT as director in 2003, and was promoted to the position of CEO in 2004. He became chairman of the board in early 2005. Previously, he served as vice chairman of Credit Suise Asset Management from 2002 to 2003, and as vice president, followed by president, of Merrill Lynch from 1983 to 2002.
For further information, contact Ken Brause, executive vice president of CIT: (212) 771-9650, Ken.Brause@Cit.com.
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