Silicon Valley Bank’s Parent Company Files for Bankruptcy

SVB Financial Group, the former parent company of Silicon Valley Bank, the lender that regulators seized last week after a devastating run on deposits, filed for bankruptcy on Friday.

The move would place SVB Financial, which owns other businesses aside from Silicon Valley Bank, into a court-led process, as it auctioned off units that include the investment manager SVB Capital and the brokerage firm SVB securities. Those units continue to operate and were not part of the bankruptcy filing.

The bankruptcy process would be separate from the sale of assets led by the Federal Deposit Insurance Corporation to repay Silicon Valley Bank’s depositors. SVB Financial said in a statement that it “believes it has approximately $2.2 billion of liquidity.” The company had about $3.3 billion in debt outstanding and a type of shares worth $3.7 billion.

The F.D.I.C. took over Silicon Valley Bank, a 40-year-old lender based in Santa Clara, Calif., last Friday. The nation’s 16th-largest bank, Silicon Valley Bank was one of the most prominent lenders in the world of technology start-ups. Its failure is the second-largest in U.S. history, and the largest since the financial crisis of 2008. The F.D.I.C has had trouble finding a buyer for the bank.

Article source: https://www.nytimes.com/2023/03/17/business/svb-silicon-valley-bank-bankruptcy.html