• Silicon Valley Bank parent firm, SVB Financial Group, has filed for bankruptcy protection under Chapter 11 of the US Bankruptcy Code.
• The filing will allow them to explore strategic alternatives as determined by a board-appointed restructuring team.
• Customers will receive funds elsewhere through Federal Deposit Insurance Corporation (FDIC) and Biden administration and US Treasury emergency plan.
SVB Financial Group Files For Bankruptcy Protection
SVB Financial Group, the parent company of Silicon Valley Bank, has filed for bankruptcy protection according to a press release from the company on March 17. The filing was submitted in the Southern District of New York and aims to preserve company value. The legal process will allow it to explore strategic alternatives as determined by a board-appointed restructuring team made up of five members. Any sale that is arranged must be approved in court before being executed.
Liquidity and Debt Details
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. Joele Frank, a shareholder activism claims firm is involved in the case to assist with reorganization proceedings.
Impact on Other Services
Though Silicon Valley Bank has failed, SVB’s other services — SVB Capital and SVB Securities — will continue to provide services while they are no longer associated with Silicon Valley Bank following its collapse on March 10th due to US regulators control over customer assets leading to an overnight bank run amid plans for over $2 billion cash withdrawal announcement..
Where Will Customers Receive Funds?
Customers will regain access to their funds elsewhere outside of Silicon Valley Bank’s direct operations through the Federal Deposit Insurance Corporation (FDIC) which provides customers with their insured funds portion as well as through Biden administration and U.S Treasury emergency plan announced shortly after failure took place .
Though bankruptcy protection may potentially help lead to recovery for SVB Financial Group, customers can rest assured that they have ways that they can receive their funds back from this incident either through FDIC or Biden administration/U.S Treasury emergency plan .