SVB Financial Group files for Chapter 11 bankruptcy

SVB Financial Group, the former subsidiary of Silicon Valley Bank (SVB), filed a bankruptcy filing under Chapter 11 of the U.S. Bankruptcy Code.

According to the petition, the assets of SVB Capital’s venture arm, the broker-dealer SVB Securities, and the limited partnerships are not included in the proceedings.

The entities will continue to operate as usual, while SVB Financial Group evaluates strategic alternatives for the business.

The company stressed that it is no longer affiliated with Silicon Valley Bank and its wealth- and asset-management unit SVB Private.

The bank’s successor, Silicon Valley Bridge Bank, operates under the jurisdiction of the FDIC and is not included in the Chapter 11 filing.

SVB Group estimates its liquidity at $2.2 billion. Among its assets, in addition to its stake in SVB Capital and SVB Securities, there are \”other investment accounts in securities and other assets,\” for which it is also exploring strategic alternatives.

SVB Group’s accumulated debt stands at about $3.3 billion in unsecured bonds that have no claim on the assets of SVB Capital or SVB Securities. SVB Group also holds $3.7 billion in preferred shares.

The company intends to implement a court-supervised process to evaluate strategic alternatives for SVB Capital, SVB Securities, and other assets.

Earlier, on March 10, the California Department of Financial Protection and Innovation closed SVB and appointed the FDIC as receiver.

On March 13, the U.S. Treasury, the FRS and FDIC announced a bailout of Silicon Valley Bank — depositors will have access to their funds at the expense of shareholders and certain holders of unsecured bonds.