Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • October 2013
  • Case
  • HBS Case Collection

Oaktree and the Restructuring of CIT Group (A)

By: Victoria Ivashina and David Scharfstein
  • Format:Print
  • | Language:English
  • | Pages:18
ShareBar

Abstract

CIT's prepackaged bankruptcy marked the first time a major financial institution was able to successfully restructure and emerge from Chapter 11 bankruptcy, challenging conventional views that a financial firm could not survive bankruptcy proceedings as a going concern. A diverse group of private investors that had accumulated a large position in CIT in the period leading up to the restructuring played a central role in the success of this restructuring. The case protagonist is Rajath Shourie, Managing Director at Oaktree Capital Management. Shourie evaluates the opportunity to extend a $3 billion rescue credit facility to CIT, together with five other large creditors of the struggling bank. The decision takes place just one day after CIT was denied access to the Temporary Liquidity Guarantee Program (TLGP). This case provides a platform for discussing what constitutes a good attractive distressed target. (In parallel, students can gain in-depth insight into alternative financing models of corporate lenders, including banks and finance companies.) The second major component of the case concerns distressed debt investment strategies, and provides an illustration of turning an investment in public debt into a position of control over CIT's management and the restructuring process.

Keywords

Debt Securities; Restructuring; Financial Services Industry

Citation

Ivashina, Victoria, and David Scharfstein. "Oaktree and the Restructuring of CIT Group (A)." Harvard Business School Case 214-035, October 2013.
  • Educators
  • Purchase

About The Authors

Victoria Ivashina

Finance
→More Publications

David S. Scharfstein

Finance
→More Publications

Related Work

    • October 2013
    • Faculty Research

    Oaktree and the Restructuring of CIT Group (B)

    By: Victoria Ivashina and David Scharfstein
    • November 2013
    • Faculty Research

    Oaktree and the Restructuring of CIT Group (A) and (B)

    By: Victoria Ivashina and David S. Scharfstein
Related Work
  • Oaktree and the Restructuring of CIT Group (B) By: Victoria Ivashina and David Scharfstein
  • Oaktree and the Restructuring of CIT Group (A) and (B) By: Victoria Ivashina and David S. Scharfstein
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Accessibility
  • Digital Accessibility
Copyright © President & Fellows of Harvard College