• SVB Financial Group, the parent company of Silicon Valley Bank, has filed for bankruptcy protection.
• The filing is in the Southern District of New York and aims to preserve company value.
• Customers will receive their funds from the Federal Deposit Insurance Corporation (FDIC) and an emergency plan from the Biden administration and U.S. Treasury.
Silicon Valley Bank Parent Files for Bankruptcy Protection
SVB Financial Group, the parent company of Silicon Valley Bank, has voluntarily filed for a court-organized reorganization under Chapter 11 of the U.S. Bankruptcy Code in the Southern District of New York. The restructuring team appointed by the board will explore strategic alternatives as determined by a board-appointed restructuring team made up of five members that are already in progress, with any sale that is arranged requiring approval in court before it is executed. The bankruptcy case aims to preserve company value with $2.2 billion liquidity, $3.3 billion debt in aggregate principal amount of unsecured notes, and $3.7 billion outstanding preferred equity; Joele Frank assisting in this process as well.
Silicon Valley Bank Ceased Operations
Shortly after announcing plans to over $2 billion of funds, Silicon Valley bank ceased operations on March 10th as U.S regulators took control of customer assets; leading to a weekend bank run and affecting companies such as Circle and BlockFi.
Funds Available Elsewhere
While SVB’s other services — SVB Capital and SVB Securities — will continue to provide services, customers affected by Silicon Valley Banks‘ failure can receive their funds elsewhere through Federal Deposit Insurance Corporation (FDIC) providing them with the insured portion or through an emergency plan created by Biden administration and U.S Treasury.
No Longer Associated With Failed Silicon Valley Bank
The press release noted that SVB Financial Group is no longer associated with failed Silicon Valley Bank.
Strategic Alternatives Process In Progress
The filing allows SVB Financial Group to explore strategic alternatives as determined by its board-appointed restructuring team made up of five members – with any sale that is arranged needing approval in court before being executed