Silicon Valley Bank’s parent company files for bankruptcy
SVB Securities and Capital continues to operate despite the failure of Silicon Valley Bank.
According to a March 17 news statement, SVB Financial Group, the parent company of Silicon Valley Bank, has filed for bankruptcy protection.
The notification reveals that SVB Financial Group has voluntarily filed for Chapter 11 court-supervised restructuring.
The document was filed in the Southern District of New York. According to SVB Financial Group, the legal procedure will enable it to examine strategic options as selected by a five-member restructuring committee constituted by the board. It emphasized that its strategic alternatives process is already underway and stressed that the court must authorize any transaction before being finalized.
The purpose of the bankruptcy proceeding is to protect the company’s worth. The business estimates that it has $2,2 billion in cash assets, $3,3 billion in total principal amount of unsecured notes, and $3,7 billion in outstanding preferred shares. The lawsuit involves Joele Frank, a business recognized for its engagement in shareholder activism allegations.
Notwithstanding the failure of Silicon Valley Bank, SVB’s other businesses, SVB Capital, and SVB Securities, will continue to operate. According to the press statement, SVB Financial Group is no longer affiliated with the defunct Silicon Valley Bank.
Silicon Valley Bank ceased operations on March 10 as U.S. officials seized control of client assets and dissolved the bank. The collapse came soon after the business announced its intention to raise more than $2 billion, causing a weekend bank rush. The bank’s demise impacted circle and BlockFi.
Customers will regain access to their cash elsewhere, even though bankruptcy protection will assist the firm in continuing normal operations and may lead to recovery.
Customers will get the insured part of their assets from the Federal Deposit Insurance Corporation (FDIC). In the meantime, a Biden administration and U.S. Treasury emergency plan will supply consumers with all other qualified monies.
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