• SVB Financial Group, the parent company of Silicon Valley Bank, has filed for bankruptcy protection.
• The filing is in the Southern District of New York and aims to preserve company value.
• Customers will regain access to their funds elsewhere through the Federal Deposit Insurance Corporation (FDIC).
SVB Financial Group Files for Bankruptcy Protection
SVB Financial Group, the parent company of Silicon Valley Bank, has voluntarily filed for a court-organized reorganization under Chapter 11 of the U.S. Bankruptcy Code in the Southern District of New York on March 17th. The filing aims to preserve company value while a board-appointed restructuring team evaluates strategic alternatives. Joele Frank, a company known for its involvement in shareholder activism claims, is involved in the case.
Strategic Alternatives Process In Progress
The press release indicates that SVB Financial Group’s strategic alternatives process is already underway and any sale that arises must be approved by a court before it is executed. The company believes it has $2.2 billion of liquidity, $3.3 billion of debt in aggregate principal amount of unsecured notes, and $3.7 billion of outstanding preferred equity available for restructuring purposes.
Silicon Valley Bank Halted Operations
Silicon Valley Bank halted operations on March 10 due to U.S regulators taking control over customer assets after announcing plans to over $2 billion worth of funds which initiated an unexpected bank run over the weekend period surrounding this announcement.. Circle and BlockFi were some among many cryptocurrency companies affected by this failure but SVB’s other services — SVB Capital and SVB Securities — will continue to operate as usual without ties from Silicon Valley Bank .
FDIC To Reimburse Customers
Customers who had investments with Silicon Valley Bank will receive back their insured portion through the Federal Deposit Insurance Corporation (FDIC). Furthermore President Biden’s administration and U.S Treasury have come up with an emergency plan which will provide customers with additional funds if necessary once further investigations into this matter are completed .
In conclusion SVB Financial Group has taken measures to ensure that their company value remains intact while they explore strategic alternatives under Joele Frank’s guidance as well as providing customers with access to their funds through FDIC and Biden’s administration emergency plan when needed .