By Anna Prior
CIT Group Inc. (CIT) said Friday it has reached an agreement
with former parent Tyco International Ltd. (TYC) to settle a tax
dispute.
According to a filing with the Securities and Exchange
Commission, CIT agreed to pay Tyco $60 million, which the
commercial lender said will result in a fourth-quarter charge
against earnings of $45 million net of reserves.
Tyco, meanwhile, agreed to release all of its rights and claims
under the tax agreement, said CIT.
The dispute stemmed from a tax agreement the companies entered
into when Tyco spun off CIT in 2002, under which CIT was to pay
Tyco for any savings the lender gained under so-called tax
attributes Tyco created while it owned CIT, according to the
lender's regulatory filings.
A representative for Tyco didn't immediately respond to a
request for comment.
CIT, led since 2010 by Wall Street veteran John Thain,
specializes in making loans to small and midsize businesses for
everything from equipment purchases to acquisitions. It has clawed
its way back to profitability since emerging from Chapter 11
bankruptcy in late 2009.
The company in October reported it swung to a third-quarter
profit, helped by lower expenses and stronger loan volume.
CIT shares ended Friday at $50.74 and were flat in light
after-hours trading. Tyco shares, meanwhile, edged down a penny to
$39.60 after hours.
Write to Anna Prior at anna.prior@wsj.com
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