This is exactly what I was talking about – when Carl Icahn gets involved with a company, it always seems to turn into a freak show. Today CIT responded to Icahn and his attempt to interject himself into the mix as a means of picking up assets on the cheap:

Mr. Icahn is seeking to convince smaller bondholders to vote against the Company’s proposed restructuring plan now in exchange for his ill-defined promise that some of Mr. Icahn’s unidentified “affiliated entities” will eventually deliver on that vague promise.

…

Mr. Icahn has also misrepresented the fundamental economics of the Company’s restructuring plan. As described in CIT’s plan of reorganization, senior unsecured bondholders would receive consideration of $700 in new secured bonds for every $1,000 of existing bonds, in addition to equity consideration which would allow for participation in future value created by the Company. In addition, under the Company’s plan, bondholders would receive substantially all of the equity of CIT.

…

Second, with regard to restrictions on the use of cash, contrary to Mr. Icahn’s assertions, CIT has incorporated into its plan a cash control process that places restrictions on the reinvestment of cash into the business and ensures that certain cash flows are used to accelerate the repayment of debt.

My guess – CIT will do everything in their power to see that Icahn does not get his way.

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