SVB Financial Group files for bankruptcy protection in the US
SVB Financial Group, the former parent company of beleaguered Silicon Valley Bank, has filed for Chapter 11 bankruptcy proceedings in the US.
SVB Financial files for bankruptcy
The company is no longer affiliated with Silicon Valley Bank North America – which is now under Federal Deposit Insurance Corporation (FDIC) control after its high profile collapse – or the bank’s private banking and wealth management business, SVB Private. As such, the bank’s successor, Silicon Valley Bridge Bank, N.A., is not included in the Chapter 11 filing.
Subsidiaries SVB Securities and SVB Capital, as well as their funds and general partner entities, are also not included in the filing and continue to operate.
What SVB Financial intends to do with these entities will be hashed out during the bankruptcy proceedings.
A course of action will be determined by a five-member strong “restructuring committee” appointed by SVB Financial Group’s board of directors.
Any sale of the aforementioned entities will be subject to court approval, SVB Financial says.
The company believes it currently has around $2.2 billion of liquidity. In addition, the firm’s funded debt is around $3.3 billion. It also has $3.7 billion of preferred equity outstanding.
SVB Financial will cooperate with the newly named Silicon Valley Bridge Bank, chief restructuring officer William Kosturos says, adding: “We are committed to finding practical solutions to maximise the recoverable value for stakeholders of both entities.”
The firm says it filed a voluntary petition for a court-supervised reorganisation under Chapter 11 in the United States Bankruptcy Court for the Southern District of New York “to preserve value”.
