Is Jeffrey Peek stepping down from CIT to keep the company alive?

CIT Group (CIT) chairman and CEO Jeffrey Peek announced today that he plans to retire on December 31. The announcement comes right in the middle of closed-door negotiations as CIT tries to get bondholders to accept a massive debt swap or a prepackaged bankruptcy. If both options fail, CIT will head into a Chapter 11 filing from which it may never exit.

Peek announced these negotiations just two weeks ago; Bloomberg.com reported on October 2 that bondholders seeking to avoid collapse were putting together a $6 billion bailout package to help finance a prepackaged bankruptcy if the debt exchange fails. The new package would have lower interest rates than the original loans' 13 percent annual rate. But that week has come and gone, and the deal appears not to have been worked out.