CIT Group Inc.'s (CIT) bondholders have only until midnight Thursday to cast their votes on the future of the embattled commercial lender, but they may have to wait until sometime over the weekend to finally learn its fate.

Bondholders have until 11:59 p.m. EDT to exchange some $31 billion in debt for new bonds that mature later and preferred stock in a reorganized CIT. But it may take a while to count the votes. One person familiar with the process said CIT has distributed 150,000 ballots.

The century-old company, one of the largest lenders to small and medium-sized businesses, is hoping to cut its $31 billion bond debt by at least $5.7 billion.

If the exchange offer doesn't get enough support, CIT hopes that enough bondholders will accept a prepackaged bankruptcy plan that would permit it to restructure its debt with the help of a federal judge and re-emerge within a couple of months.

The prices of CIT's bonds and the cost of insuring this debt against a default indicate that investors are betting that the debt swap will fail and CIT will file for bankruptcy.

"This company is going to a prepack [bankruptcy]," said Dwayne Moyers, portfolio manager at SMH Capital Advisors.

If bondholders agree to the exchange offer, they could get as much as 90 cents on the dollar of new debt plus some equity. If they vote in favor of a prepackaged bankruptcy, CIT is offering 70 cents on the dollar plus equity in the reorganized company.

Moyers, for one, said he intends to vote against the tender offer and for the prepackaged bankruptcy.

CIT's $500 million of bonds due Nov. 3 were quoted at around 67 cents on the dollar Thursday, according to one trader. Meanwhile, it costs investors about $3.9 million upfront plus a $500,000 annual fee to protect $10 million of CIT's senior bonds against a default for five-years. This represents an acute level of distress and suggests bondholders believe CIT has slim chance of staying out of bankruptcy court.

If the debt exchange fails, CIT wouldn't make $800 million of payments on bonds which mature Nov. 1 and Nov. 3, and would file for bankruptcy as soon as Monday, people familiar with the matter have said previously. A prepackaged bankruptcy would mean CIT could exit the process within a couple of months.

But even a successful bankruptcy may not be enough to fix the company's broken business model. CIT's ability to raise funds cheaply--a crucial requirement for any lender --remains severely limited by low credit ratings and by Federal Deposit Insurance Corp. limits on the firm's capacity to raise deposits through its Utah bank.

Unless these hurdles are removed, there is probably very little scope for CIT to revive its lending business; the company may use the breathing room eked out by the restructuring to wind down its loan book and shrink to a shell of its former self.

"The company's model just doesn't work," said Jason Mudrick of Mudrick Capital Management, who owns CIT bonds. "The pre-pack would buy it a lot of time to figure out the next steps. But the question is: Can the company convince the government that it is capitalized in the right way to allow it to move the assets to the bank?"

On Wednesday, CIT brushed aside a last-ditch effort by billionaire investor Carl Icahn to scupper its restructuring plan. In a statement, it said it had raised an extra $4.5 billion in financing which it would add to a $3 billion loan put in place by a group of the firm's largest bondholders in July.

The announcement came less than 24 hours after Icahn, who is CIT's largest bondholder, raised the ante on the firm's reorganization plan, giving the company less than an hour to respond to his offer to provide $4.5 billion in loan financing while threatening to sue the firm if it went with the rival bondholder loan.

Icahn, who believes bondholders could recoup all of their investment in a more traditional bankruptcy, offered to buy bonds from CIT's bondholders at 60 cents on the dollar if they help him block the firm's reorganization plan.

Even if Icahn fails to derail CIT's restructuring plans, it's unlikely that he will throw in the towel, according to Mudrick.

"It you look at Icahn's record historically, he doesn't go away," Mudrick said.

-By Kate Haywood, Dow Jones Newswires; 212-416-2218; kate.haywood@dowjones.com

(Aparajita Saha-Bubna in Boston also contributed to this article.)