Silicon Valley Bank Parent Files for Bankruptcy Protection
• SVB Financial Group, the parent company of Silicon Valley Bank, has filed for bankruptcy protection.
• The filing was submitted in the Southern District of New York and aims to preserve company value.
• Customers affected by the bank’s failure will receive access to their funds from the FDIC and an emergency plan from the Biden administration and U.S. Treasury.
SVB Financial Group Files for Bankruptcy Protection
SVB Financial Group, the parent company of Silicon Valley Bank, has filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code in the Southern District of New York in order to explore strategic alternatives as determined by a board-appointed restructuring team made up of five members. The bankruptcy case is intended to preserve company value while Joele Frank, a shareholder activist firm, is involved in the proceedings.
Silicon Valley Bank Closes
The announcement comes shortly after Silicon Valley Bank closed its doors on March 10 after announcing plans to over $2 billion of funds leading to a weekend bank run – affecting companies such as Circle and BlockFi who were customers of the bank.
Preserving Company Value
The press release indicated that SVB Financial Group has $2.2 billion of liquidity, $3.3 billion of debt in aggregate principal amount of unsecured notes, and $3 billion dollars‘ worth of outstanding preferred equity at this time which are all meant to be preserved during this legal process.
Funds Provided Elsewhere
Customers affected by the failed Silicon Valley Bank will not be able to receive access to their funds through SVB’s services as they are no longer associated with it – instead they will get access through other means such as through insurance provided by Federal Deposit Insurance Corporation (FDIC) or an emergency plan from the Biden administration and U.S Treasury Department if applicable according to regulations set out by them both respectively.
Despite Silicon Valley Bank failing, SVB Capital and SVB Securities still operate providing services outside what was previously offered by its predecessor