SVB Monetary Group Recordsdata for Chapter 11 Chapter Safety to ‘Protect’ Agency’s Worth
March 17, 2023
On March 17, 2023, SVB Monetary Group, the mother or father firm of Silicon Valley Financial institution, filed for Chapter 11 chapter safety within the Southern District of New York. The corporate acknowledged that it’s now not related to Silicon Valley Financial institution (SVB) after the Federal Deposit Insurance coverage Company (FDIC) positioned it into receivership final week.
3 SVB Entities Unaffected by Chapter Submitting; CEO Faces Scrutiny for Share Sale Earlier than Silicon Valley Financial institution Collapse
On Friday, SVB Monetary Group launched a press release detailing its voluntary petition for a court-supervised reorganization underneath Chapter 11 chapter safety. The announcement acknowledged that the aim of the submitting is to protect the remaining worth of the corporate. The chapter submitting doesn’t contain three entities, together with the FDIC-operated bridge financial institution Silicon Valley Bank, N.A., SVB Securities, and SVB Capital’s funds.
The monetary establishment’s three verticals are nonetheless working as they had been earlier than SVB was positioned into FDIC receivership. SVB Monetary Group acknowledged that it holds “roughly $2.2 billion of liquidity” and has funded debt of “roughly $3.3 billion.” The monetary firm additionally has $3.7 billion of excellent most well-liked fairness, which shall be utilized to judge strategic options, as per the agency’s clarification.
“The Chapter 11 course of will enable SVB Monetary Group to protect worth because it evaluates strategic options for its prized companies and belongings, particularly SVB Capital and SVB Securities,” the chief restructuring officer for SVB Monetary Group, William Kosturos, stated in an announcement. “SVB Capital and SVB Securities proceed to function and serve purchasers, led by their longstanding and unbiased management groups.” Kosturos continued:
SVB Monetary Group will proceed to work cooperatively with Silicon Valley Bridge Financial institution. We’re dedicated to discovering sensible options to maximise the recoverable worth for stakeholders of each entities.
The submitting for Chapter 11 follows experiences that Silicon Valley Bank CEO Greg Becker faces scrutiny for promoting $3 million value of SVB shares previous to the financial institution’s collapse. The Every day Mail reported that Becker and his spouse flew top quality to their residence in Maui, Hawaii after the financial institution failed. Becker, who had labored at SVB for over 30 years, was fired by U.S. president Joe Biden when the FDIC took over, together with SVB’s high lieutenants.
What impression do you suppose SVB Monetary Group’s chapter submitting could have on the way forward for Silicon Valley Financial institution? Share your ideas about this topic within the feedback part beneath.
