“Parent Company of Silicon Valley Bank Declares Bankruptcy”
Silicon Valley Bank suddenly collapsed on March 10 (Credits: Reuters)
The parent company of Silicon Valley Bank, which collapsed last week, has filed for bankruptcy.
SVB Financial Group’s Chapter 11 bankruptcy protection filing on Friday puts it in a court-led process.
It comes exactly a week after the federal government seized the bank, upending the industry in the US and causing fears of larger issues in the global banking system.
After the Federal Deposit Insurance Corporation took over the bank, it is no longer affiliated with SVB Financial Group.
The Silicon Valley Bank collapse was the second biggest bank failure in US history (Picture: Reuters)
The bankruptcy filing sets up a legal showdown for the bank’s remaining assets between regulators aiming to help depositors and creditors of the holding company.
Meanwhile, SVB Financial Group stated it ‘believes it has approximately $2.2 billion of liquidity’. It claims that its assets that will potentially put up for sale include its venture capital, a private credit fund and a broker-dealer.
‘The Chapter 11 process will allow SVB Financial Group to preserve value as it evaluates strategic alternatives for its prized businesses and assets,’ stated the company’s chief restructuring officer William Kosturos.
SVB Financial Group had roughly $3.3billion in outstanding debt as well as shares worth $3.7billion.
The Santa Clara-based bank, operating for four decades, was the 16th largest bank in the US and a major lender to tech startups. It was the biggest bank failure since the 2008 Great Recession and the second-largest bank failure in the country’s history.
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