Just days after its former subsidiary, Silicon Valley Bank, failed and was taken over by regulators, SVB Financial filed for bankruptcy in New York on Friday — an effort to save assets and businesses it still controls, Including its investment bank and venture capital. arm.
On Friday morning, SVB Financial announced that it has filed a voluntary petition for court-supervised reorganization in the US Bankruptcy Court for the Southern District of New York.
The company, which is no longer affiliated with Silicon Valley Bank or its government-controlled successor, Silicon Valley Bridge Bank, said it has about $2.2 billion in liquidity and $3.3 billion in funded debt.
SVB’s broker-dealer business, SVB Securities, and its venture capital business, SVB Capital, are not included in the funding filing.
In a statement, William Kostouros, chief restructuring officer of SVB Financial, said the Chapter 11 process will allow the holding company to “preserve value” as it continues its “valued businesses and assets, particularly SVB Capital and SVB Securities.” Evaluates options.
Speculation over SVB Financial's impending bankruptcy has increased since Monday, when the company announced it would "explore strategic options" for its remaining businesses, including its $9.5 billion venture capital and private credit platform. The announcement came after the company's bank suddenly collapsed on Friday, forcing the Federal Deposit Insurance Corp. to declare it a failed bank and take its deposits. Under bankruptcy rules, stockholders are wiped out if bondholders are not met, said Steve Sosnik, chief strategist at Interactive Brokers.
"The failure of the SVB is the result of something much bigger – and how we may be facing the beginning rather than the end of a wider cycle of delinquency, default and bankruptcy," says Ian Cunningham, a portfolio manager at investment firm Ninety. One.
Banks rush to borrow record-breaking $165 billion from Fed after SVB failure (Forbes)
What to know about the collapse of Silicon Valley Bank - the biggest bank failure since 2008 (Forbes)
Credit: www.forbes.com /