SVB financial group filed for bankruptcy

Silicon Valley Bank’s parent company filed for bankruptcy after anxiety spread among its longtime tech startup customer base, prompting regulators to seize the firm’s banking arm.

SVB Financial Group listed assets and liabilities of up to $10 billion each in a Chapter 11 bankruptcy filing filed in New York. Broker-dealer SVB Securities and venture capital arm SVB Capital are not included in the filing, according to the filing.

Because Silicon Valley Bank is a California-registered commercial bank and part of the Federal Reserve, it is not eligible for bankruptcy and instead came under the control of the Federal Deposit Insurance Corporation. However, its parent company is eligible to apply to protect its remaining assets and work to pay off debt to creditors, including bondholders.

The company said that, following the bankruptcy proceedings, SVB Financial is no longer associated with Silicon Valley Bank NA or its private banking and wealth management business, SVB Private.

According to the statement, SVB “believes” it has about $2.2 billion in liquidity and counts its stakes in SVB Capital and SVB Securities among its assets. He owes about $3.3 billion to bondholders.

Centerview Partners helps SVB evaluate strategic alternatives for SVB Capital and SVB Securities. There has been considerable interest in the process, according to the filing, and any sale would require bankruptcy court approval.

“SVB Financial Group will continue to work with Silicon Valley Bridge Bank,” William Kosturos, director of restructuring at SVB Financial Group, said in a statement. “We are committed to finding practical solutions to maximize recoverable value for the stakeholders of both businesses.”

[More: Silicon Valley Bank wealth management sale could be quick]

Based in Santa Clara, California, SVB is the biggest bank to fail in more than a decade, with total assets of about $209 billion at the end of last year, according to the FDIC. It is also the second largest bank managed by the agency, behind only Washington Mutual Inc., which collapsed in 2008.

Anxiety in tech circles rose in March after Peter Thiel’s Founders Fund and other high-profile venture capital firms advised their portfolio companies to withdraw money from the bank. The advice came a day after the bank’s parent company announced it would try to raise more than $2 billion after significant losses in its portfolio.

The Silicon Valley Bank was founded in 1983 as a result of a poker game between Bill Biggerstaff and Robert Medearis, according to a statement made on the occasion of the bank’s 20th anniversary. Since its inception, the firm has specialized in providing financial services to technology startups.

As of December 31, the bankrupt parent company held about $2.3 billion in cash, $500 million in investment securities and $475 million in other assets, according to regulatory filings. At the time, he had about $3.4 billion in long-term debt.

SVB Financial Group Case, 23-10367, United States Bankruptcy Court for the Southern District of New York.

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