CIT is close to handing control to bondholders, in a sweeping exchange offer that would eliminate 30% to 40% of its more than $30 billion in outstanding debt, the Wall Street Journal reports.

The plan would offer bondholders new debt secured by CIT assets, which would mature later than current debt.

If not enough bondholders agreed to the plan, the company could seek to execute the restructuring in bankruptcy court, the person said. The result could potentially be one of the largest Chapter 11 bankruptcy-court filings in U.S. history.

The source quoted by the WSJ cautions that talks “remained fluid and many details remained to be ironed out.

To some extent it's been predicted for awhile that the bondholders would end up with the company. The timing of the news also suggests chicanery in the planting of the story this morning, about how the company could merger with IndyMac -- a story fiercely denied by prospective matchmaker John Paulson.