Factoring clients of CIT Group Inc. are being given the option of signing deferred purchase agreements as a precaution to protect their accounts, financial sources said.
Typically, when factors collect on behalf of client accounts, they first take title to the invoices. That’s the subject of a debate over who — the clients or CIT — would own the collected funds in the event of a bankruptcy. With a deferred purchase agreement, the clients would retain title to the funds even though CIT is making the collection requests. CIT executives declined comment.
The new agreements that are signed would supersede existing client agreements, one factor not connected with CIT said.
Gary Wassner, president of factoring firm Hilldun Factors, said, “This is a viable way of dealing with the uncertainty that’s there and it eliminates a lot of the concerns if CIT has to file.”
Sources familiar with CIT’s operations said that, in the event of a CIT bankruptcy, it would be the holding company that files, while operating units such as the factoring division would not be included in the filing. The rationale, they said, was that it would be easier to sell the factoring operation if it was not entangled in a bankruptcy. That’s because bankruptcy court supervision and a required auction process would limit CIT’s flexibility in any sale.
Potential buyers are already eyeing CIT’s factoring business, including, according to financial sources, J.P. Morgan Chase, W.L. Ross & Co. and GMAC Financial Services. A joint venture bid from Warren Buffett’s Berkshire Hathaway and Leucadia National also is said to be a possibility.
Michael Appel, managing director of Quest Turnaround Advisors, doesn’t expect an immediate CIT bankruptcy filing, despite a disclosure to the Securities and Exchange Commission Tuesday that acknowledged one is possible if it is unable to complete its tender offer this Friday. “Those statements are required, and it’s a way to put bondholders on notice,” he said.
“There are a lot of complex negotiations going on involving lots of parties,” Appel said.
In the SEC filing, CIT said it was in negotiations with bondholders and that, while a possibility, it did not intend to seek relief under the U.S. bankruptcy code.
Still, Appel’s upset the federal government hasn’t done anything to help CIT.
“That annoys me,” Appel said. “If CIT has to file, what will the companies and retailers do? There will be no merchandise on the shelves. I don’t think the government gets it.”
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)