One of America's biggest lenders to small firms has filed for bankruptcy protection, despite receiving government support.
In one of the biggest corporate failures in US history, CIT Group said the move would allow the bank to restructure is debts.
The move caused the Asian markets to drop sharply.
CIT has struggled to stay afloat since July, despite the US government buying up more than £1.4bn in shares in the bank in December last year.
The bank said in a statement that its bondholders overwhelmingly opted for a reorganisation plan which will reduce total debt by £6bn while allowing the company to continue to do business.
Creditors will end up owning the company under the reorganisation plan.
"The decision to proceed with our plan of reorganisation will allow CIT to continue to provide funding to our small business and middle market customers, two sectors that remain vitally important to the US economy," said chief executive Jeffrey Peek.
Most bondholders will end up with new CIT debt worth about 70% of the face value of their old debt.
Preferred shareholders, including the US government, will get money only after other creditors are paid back.
CIT's fate is crucial to small firms in the US.
The bank is the financier for about 2,000 vendors that supply merchandise to more than 300,000 stores.
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