One week after Silicon Valley Bank collapsed, the bank’s parent company—SVB Financial Group—filed for Chapter 11 bankruptcy.
Key Details
- The company plans to use the bankruptcy to “evaluate strategic alternatives” for SVB Capital and SVB Securities as well as other assets and investments.
- The company says it has about $2.2 billion in liquidity, and the filing will allow it to sell off the assets to meet creditors’ claims.
- Silicon Valley Bank is not included in the filing as it was taken by the government after its quick collapse last week, and venture capital firm SVB Capital and broker-dealer business SVB Securities will not be included either, as both are still functional.
Why it’s news
Last week, Silicon Valley Bank (SVB) suffered a quick fall in just two days, causing panic that shook the financial world and had many questioning the confidence of the banking systems.
Now one week after the collapse, the bank’s former parent company is filing for Chapter 11 bankruptcy protection. SVB Financial restructuring officer William Kosturos says the bankruptcy process would allow the group “to preserve value as it evaluates strategic alternatives for its prized businesses and assets.”
SVB Financial Group is believed to have around $2.2 billion in liquidity and plans to sell it off to meet claims.
“In addition to cash and its interests in SVB Capital and SVB Securities, SVB Financial Group has other valuable investment securities accounts and other assets for which it is also exploring strategic alternatives,” the company says.
The filing was made in the U.S. Bankruptcy Court for the Southern District of New York and will allow the group to hold onto value as it receives court-supervised reorganization.
