NEW YORK - November 1, 2009 - CIT Group, one of the largest small-business lenders in the United States, filed for bankruptcy Sunday with its board approving a "prepackaged" restructuring plan to shed 10 billion dollars in debt.

After being rescued from almost certain collapse in July following a U.S. government rejection of a bailout plea, the company had struggled for months to stay afloat, receiving an emergency loan of 4.5 billion dollars as recently as October 28.

But when a comprehensive debt-exchange plan recently failed, the board of the company, which ran into financial problems after a home mortgage meltdown plunged the country into its worst economic crisis in decades, had begun reorganizing its capital structure ahead of a possible bankruptcy.

"With the overwhelming support of its debt-holders, the board of directors voted to proceed with the prepackaged plan of reorganization for CIT Group Inc. and a subsidiary that will restructure the company's debt and streamline its capital structure," the company said in a statement after the board met Sunday.

"Under the plan, CIT expects to reduce total debt by approximately 10 billion dollars, significantly reduce its liquidity needs over the next three years, enhance its capital ratios and accelerate its return to profitability."