Silicon Valley Bank’s Parent Company Files for Bankruptcy

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Business|Parent Company of Silicon Valley Bank Files for Bankruptcy

The determination would spot SVB Financial Group, which owns different businesses speech from the collapsed Silicon Valley Bank, into a court-led process arsenic creditors look to retrieve funds.

Silicon Valley Bank, which has office  successful  Santa Clara, Calif., was seized by national  regulators connected  Friday.
Credit...Ian C. Bates for The New York Times

Lauren Hirsch

March 17, 2023, 8:21 a.m. ET

SVB Financial Group, the genitor institution of Silicon Valley Bank, the lender that was seized by regulators past week aft a devastating tally connected deposits, filed for bankruptcy connected Friday.

The determination would spot SVB Financial, which owns different businesses speech from Silicon Valley Bank, into a court-led process, arsenic it auctions disconnected units that see the concern manager SVB Capital and the brokerage steadfast SVB securities. Those units proceed to run and were not portion of the bankruptcy filing.

The bankruptcy process would beryllium abstracted from the merchantability of assets led by the Federal Deposit Insurance Corporation to repay Silicon Valley Bank’s depositors. SVB Financial said successful a connection that it “believes it has astir $2.2 cardinal of liquidity.” The institution had astir $3.3 cardinal successful indebtedness outstanding and a benignant of shares worthy $3.7 billion.

The F.D.I.C. took implicit Silicon Valley Bank, a 40-year-old lender based successful Santa Clara, Calif., past Friday. The nation’s 16th largest bank, Silicon Valley Bank was 1 of the astir salient lenders successful the satellite of exertion start-ups. Its nonaccomplishment is the second-largest successful U.S. history, and the largest since the fiscal situation of 2008. The F.D.I.C has had trouble uncovering a purchaser for the bank.

The bankruptcy filing sets up a conflict betwixt SVB Financial’s creditors and the F.D.I.C. Each broadside is apt to clamor for the proceeds SVB Financial generates done the merchantability of its assorted businesses.

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