More than ten days after Californian authorities shut down Silicon Valley Bank, the SVB Financial Group filed for bankruptcy.
Silicon Valley Bank (SVB) Financial Group, Santa Clara-based financial services company, had filed for voluntary Chapter 11 bankruptcy.
According to the press release shared on March 17th, the company filed for bankruptcy in the United States Bankruptcy Court for the Southern District of New York.
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In the announcement, the company highlighted that its SVB Securities and SVB Capital are not included in the Chapter 11 procedures.
SVB Financial Group Chief Restructuring Officer (CRO), William Kosturos, noted:
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. SVB Capital and SVB Securities continue to operate and serve clients, led by their longstanding and independent leadership teams.
The company highlighted that SVB Financial Group “is no longer affiliated with” Silicon Valley Bank.
SVB Financial Group reportedly has $2.2 billion of liquidity. On top of that, SVB Financial Group has funded debt of around $3.3 billion “in aggregate principal amount of unsecured notes.” Moreover, it has $3.7 billion of “preferred equity outstanding.”
In the press release, SVB Financial Group also stated that it plans to file “customary first-day motions” and aims to receive authorization to continue the operations of SVB Financial Group.
When talking about the matter, William Kosturos stated:
SVB Financial Group will continue to work cooperatively with Silicon Valley Bridge Bank. We are committed to finding practical solutions to maximize the recoverable value for stakeholders of both entities.
The collapse of Silicon Valley Bank was the second biggest bank failure since the 2008 financial crisis. One of the biggest stablecoin issuers in the crypto industry Circle has experienced the biggest impact. Soon after the news about SVB collapse was revealed, its stablecoin, USD Coin (USDC), lost its $1 value.
The price of USDC fell as low as $0.87. However, the downfall of the price was temporary as a few days later, USDC regained its dollar peg.
