Jeffrey Peek, the CEO of embattled small-business lender CIT, has announced his resignation, a not-very-surprising turn of events that pushes the already teetering company closer to bankruptcy: Since the news broke, shares have fallen to 85 cents. As for Peek’s legacy, it’s not looking too good.
The Journal isn’t shy about piling it on:
Peek, 62, joined CIT in 2003 after being denied the CEO job at Merrill Lynch & Co. His tenure at the top of CIT has not been smooth, especially since expanding the commercial lender into volatile subprime mortgages and student loans. The New York-based company has lost $5 billion during the last nine quarters as the financial crisis hurt its ability to make loans and wiped out its balance sheet. He said that “now is the appropriate time to focus on a transition of leadership” in a statement, but there has been speculation Peek would lose his job since bondholders launched a plan to restructure about $31 billion in debt. As of Tuesday, that restructuring plan seemed destined to fail and the company now teeters on the edge of seeking bankruptcy protection.
Ouch. To be fair, they didn’t mention that time he cost the debate team the win or his fumble of the ball in the Big Game, but still. For a guy who was reportedly “beaten down by the constant criticism hurled at him” back in April, that’s got to hurt.