The future of CIT Group Inc. (CIT) grew murkier Wednesday after the disclosure that bond fund giant Pacific Investment Management Co. had quit a steering committee that's trying to prevent the commercial lender from collapse.

Pimco, the world's biggest bond fund and a unit of Allianz SE (AZ), sold off a major portion of its holdings in CIT debt, according to people familiar with the matter. This forced Pimco off a committee made up of the company's largest bondholders.

The move was seen as another blow as CIT struggles to end months of uncertainty about its future. The century-old lender is scrambling to convince creditors to back sweeping debt restructuring, or the company will file for a pre-packaged bankruptcy.

"It's quite possible that the restructuring is unraveling," said Scott Peltz, managing director of restructuring at consultancy RSM McGladrey in Chicago. "There are so many moving pieces and different positions, that it's very difficult to think CIT would accomplish this out of court and the fact that Pimco is no longer involved would further that thought."

CIT bonds dropped across the board, while the cost of protecting the debt against a default rose, suggesting that bondholders aren't betting that the company will successfully restructure outside court. CIT shares also fell, closing down 1.7% at $1.15.

The increased potential for a bankruptcy is being closely watched because it could cause ripple effects throughout the economy and financial sector. The company has an estimated $75 billion in assets, and provides critical short-term financing to about one million small companies.

The loss of Pimco on the committee also comes amid louder calls for bondholders to reject the exchange. The aim of the exchange is to cut at least $5.7 billion off CIT's roughly $31 billion of bond debt.

Analysts at Egan-Jones Ratings Co. and CreditSights are warning bondholders that the debt exchange has very little hope of success. And, perhaps bondholders' investments would be worth more if the company is broken up.

The proposal falls short of fixing CIT's broken funding model, said Sean Egan, managing director of Egan-Jones. "They would be back round the negotiating table within six months to 18 months," he said.

News of Pimco's departure from the steering committee follows a similar move by Boston-based Baupost Group LLC, which left after the largest bondholders put together $3 billion in emergency funding. The committee now consists of Centerbridge Partners LP, Oaktree Capital Management LLC, Capital Research & Management Co. and Silver Point Capital LP.

Baupost left because the firm didn't want to sign a non-disclosure agreement that would have restricted them from trading CIT debt, according to one person familiar with the matter. The firm declined to comment.

Asked about the departure of Pimco, CIT spokesman Tim Lynch said in an e-mail "while we cannot comment on the membership of the lenders steering committee, we are grateful for their support."

Investors have until 11:59 p.m. Eastern time on Oct. 29 to tender their bonds under the restructuring plan. The insurance prices on the debt indicate that investors aren't betting that CIT will avert bankruptcy.

"Pimco was a major player and without them it looks like the restructuring is falling apart," said Michael Gallo, Jr., partner at law firm DeCotiis, FitzPatrick, Cole & Wisler, and head of the Finance Law practice group.

That concern was reflected in the credit-default market late Wednesday. It cost investors $4 million upfront plus a $500,000 annual fee to insure $10 million of CIT's bonds against a default, according to CMA DataVision. That indicates an acute level of distress and is up from $3.8 million upfront earlier Wednesday.

-By Kate Haywood and Joe Bel Bruno, Dow Jones Newswires; 212-416-2218;

(Mike Spector of The Wall Street Journal contributed to this article.)