News & Notes: Peek ’69 to resign from CIT at year’s end

Peek has served for four years as the head of CIT, which lends to nearly a million small and mid-size businesses. During his tenure, the lender expanded into the subprime-mortgage and student-loan sectors, and the expansion ultimately proved disastrous as credit demand evaporated during the economic crisis.

Peek announced his retirement to regulators and CIT’s board over the weekend before informing the bondholder steering committee on Tuesday. The announcement came two weeks before the company’s bondholders must decide whether to enact a plan to restructure $31 billion worth of debt or reorganize the company in a prepackaged bankruptcy. Bondholders have resisted the terms of the plan, and it remains unclear which option the company will choose.

Peek’s decision to step down did not come as a surprise to investors. Though many expected Peek to hold off making his announcement until a restructuring plan was in place, people involved with CIT considered his departure to be imminent.

The company has hired executive recruiters to search for Peek’s successor.