SVB Financial Group has reportedly submitted a voluntary petition to the United States Bankruptcy Court for the Southern District of New York to undergo a court-supervised reorganization under Chapter 11. This measure is intended to protect the company’s value.
SVB Financial Group clarified that the bankruptcy proceedings exclude SVB Securities and SVB Capital’s funds and general partner entities, which will operate normally while the company explores strategic alternatives for its businesses.
The company also announced that it dissociated its affiliation with Silicon Valley Bank N.A. and SVB Private. The Federal Deposit Insurance Corporation manages Silicon Valley Bridge Bank, N.A., and has no involvement in the Chapter 11 petition.
The report stated that SVB Financial Group has approximately $2.2 billion in liquidity, including cash, interests in SVB Capital and SVB Securities, and other valuable investment securities accounts and assets. The group is currently considering strategic alternatives for these additional assets.
SVB Financial Group’s funded debt amounts to around $3.3 billion in aggregate principal value of unsecured notes, and they have no claim against SVB Capital or SVB Securities. The group also has $3.7 billion of outstanding preferred equity.
William Kosturos, Chief Restructuring Officer for SVB Financial Group, stated:
“The Chapter 11 process will allow SVB Financial Group to preserve value as it evaluates strategic alternatives for its prized businesses and assets, especially SVB Capital and SVB Securities.”
He confirmed that the leadership teams of SVB Capital and SVB Securities remain independent and will continue to serve their clients. He added that they “are committed to finding practical solutions to maximize the recoverable value for stakeholders of both entities.”
Kosturos also noted that SVB Financial Group intends to maintain a collaborative relationship with Silicon Valley Bridge Bank.
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