Parent Company of Silicon Valley Bank Files for Bankruptcy

SVB Monetary Group, the previous mother or father firm of Silicon Valley Financial institution, the lender that regulators seized final week after a devastating run on deposits, filed for chapter on Friday.

The transfer would place SVB Monetary, which owns different companies apart from Silicon Valley Financial institution, right into a court-led course of, because it auctioned off models that embody the funding supervisor SVB Capital and the brokerage agency SVB securities. These models proceed to function and weren’t a part of the chapter submitting.

The chapter course of can be separate from the sale of belongings led by the Federal Deposit Insurance coverage Company to repay Silicon Valley Financial institution’s depositors. SVB Monetary mentioned in an announcement that it “believes it has roughly $2.2 billion of liquidity.” The corporate had about $3.3 billion in debt excellent and a kind of shares value $3.7 billion.

The F.D.I.C. took over Silicon Valley Financial institution, a 40-year-old lender based mostly in Santa Clara, Calif., final Friday. The nation’s Sixteenth-largest financial institution, Silicon Valley Financial institution was one of the crucial distinguished lenders on the planet of know-how start-ups. Its failure is the second-largest in U.S. historical past, and the biggest because the monetary disaster of 2008. The F.D.I.C has had hassle discovering a purchaser for the financial institution.

The chapter submitting units up a battle between SVB Monetary’s collectors and the F.D.I.C. Either side is prone to clamor for the proceeds that SVB Monetary generates by the sale of its numerous companies.