SVB Financial Group Files for Chapter 11 Bankruptcy Protection to ‘Preserve’ Firm’s Value

On March 17, 2023, SVB Financial Group, the genitor institution of Silicon Valley Bank, filed for Chapter 11 bankruptcy extortion successful the Southern District of New York. The institution stated that it is nary longer associated with Silicon Valley Bank (SVB) aft the Federal Deposit Insurance Corporation (FDIC) placed it into receivership past week.

3 SVB Entities Unaffected by Bankruptcy Filing; CEO Faces Scrutiny for Share Sale Before Silicon Valley Bank Collapse

On Friday, SVB Financial Group released a press release detailing its voluntary petition for a court-supervised reorganization nether Chapter 11 bankruptcy protection. The announcement stated that the intent of the filing is to sphere the remaining worth of the company. The bankruptcy filing does not impact 3 entities, including the FDIC-operated span slope Silicon Valley Bank, N.A., SVB Securities, and SVB Capital’s funds.

The fiscal institution’s 3 verticals are inactive operating arsenic they were earlier SVB was placed into FDIC receivership. SVB Financial Group stated that it holds “approximately $2.2 cardinal of liquidity” and has funded indebtedness of “approximately $3.3 billion.” The fiscal institution besides has $3.7 cardinal of outstanding preferred equity, which volition beryllium utilized to measure strategical alternatives, arsenic per the firm’s explanation.

“The Chapter 11 process volition let SVB Financial Group to sphere worth arsenic it evaluates strategical alternatives for its prized businesses and assets, particularly SVB Capital and SVB Securities,” the main restructuring serviceman for SVB Financial Group, William Kosturos, said successful a statement. “SVB Capital and SVB Securities proceed to run and service clients, led by their longstanding and autarkic enactment teams.” Kosturos continued:

SVB Financial Group volition proceed to enactment cooperatively with Silicon Valley Bridge Bank. We are committed to uncovering applicable solutions to maximize the recoverable worth for stakeholders of some entities.

The filing for Chapter 11 follows reports that Silicon Valley Bank CEO Greg Becker faces scrutiny for selling $3 cardinal worthy of SVB shares anterior to the bank’s collapse. The Daily Mail reported that Becker and his woman flew archetypal people to their residence successful Maui, Hawaii aft the slope failed. Becker, who had worked astatine SVB for implicit 30 years, was fired by U.S. president Joe Biden erstwhile the FDIC took over, on with SVB’s apical lieutenants.

What interaction bash you deliberation SVB Financial Group’s bankruptcy filing volition person connected the aboriginal of Silicon Valley Bank? Share your thoughts astir this taxable successful the comments conception below.

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