Silicon Valley Bank’s parent company, SVB Financial Group, has filed for bankruptcy protection. press release March 17, from the company.
SVB file for reorganization
This announcement marks SVB Financial Group’s voluntary filing for reorganization by the courts under Chapter 11 of the US Bankruptcy Code.
The application was filed in the Southern District of New York.
SVB Financial Group said the legal proceedings will allow it to consider strategic alternatives determined by a five-member restructuring team appointed by its board of directors. The company noted that a strategic replacement process was already underway, adding that any arranged sale would need to be approved by the courts prior to execution.
Bankruptcy cases are aimed at preserving the value of the company. The company believes it has $2.2 billion and $3.3 in liquidity. $1 billion of debt with an aggregate principal amount of unsecured debt and $3.7 billion of outstanding preferred stock. Joele Frank, a company known for its involvement in allegations of shareholder activism, is involved in the lawsuit.
Silicon Valley Bank has gone bankrupt, but SVB’s other services, SVB Capital and SVB Securities, will continue to serve. According to a press release, SVB Financial Group is no longer associated with the failed Silicon Valley Bank.
Customer receives funds elsewhere
Silicon Valley Bank ceased operations on March 10 as U.S. regulators closed banks and took control of customer assets. The bankruptcy came shortly after the company announced plans to raise more than $2 billion of his money, leading to a bank run over the weekend. Circle and BlockFi are among the cryptocurrency companies affected by the bank failure.
Bankruptcy protection helps the company continue normal operations and can lead to recovery, while allowing customers to regain access to their funds elsewhere.
The Federal Deposit Insurance Corporation (FDIC) provides customers with the insurance portion of the funds. on the other hand, emergency plan Starting with the Biden administration, the US Treasury will provide all other eligible funds to its clients.
