Commercial lender CIT Group filed for bankruptcy protection on Sunday after U.S. government bailout and debt exchange offer failed.

File photo taken on July 16, 2009 shows a US national flag and a flag of the CIT Group fluttering in Manhattan, New York. CIT Group Inc, a century-old commercial lender, filed for bankruptcy on Sunday but under a so-called prepackaged restructuring plan to shed 10 billion dollars in debt. [Shen Hong/Xinhua]

The New York-based company filed for Chapter 11 in U.S. Bankruptcy Court Sunday as its bondholders approved a prepackaged reorganization plan.

CIT said in a statement that the bondholders have overwhelmingly approved the reorganization plan which will reduce total debt by 10 billion U.S. dollars while allowing the company to continue to do business.

The bankruptcy "allow CIT to continue to provide funding to our small business and middle market customers, two sectors that remain vitally important to the U.S. economy," said Jeffrey M. Peek, CIT chairman and CEO.

File photo taken on July 16, 2009 shows people walking in front of the CIT Group building in Manhattan, New York. CIT Group Inc, a century-old commercial lender, filed for bankruptcy on Sunday but under a so-called prepackaged restructuring plan to shed 10 billion dollars in debt. [Shen Hong/Xinhua]

CIT listed 71 billion dollars in asset and total debt of 64.9 billion dollars. The bankruptcy protection filing is one of the biggest in U.S. corporate history.

CIT's move will wipe out current holders of its common and preferred stock, while the U.S. government will lose 2.3 billion dollars it injected to the company.

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