March 17, 2023 – One week after trading was halted for SVB Financial and regulators took control of the holding company for Silicon Valley Bank and other subsidiaries, SVB Financial has taken the next inevitable step: Today it announced that it has formally filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of New York.
SVB Securities, SVB Capital’s funds, and general partner entities are not included in the Chapter 11 filing. These businesses will continue to operate normally as SVB Financial Group proceeds with its previously announced exploration of strategic alternatives announced on Monday but did not disclose bankruptcy as one of the potential options.
“SVB Financial Group intends to use the court-supervised process to evaluate strategic alternatives for SVB Capital, SVB Securities and the company’s other assets and investments,” the company said in a press release Friday (March 17).
SVB Financial Group’s former banking unit, Silicon Valley Bank (SVB), remains under FDIC (Federal Deposit Insurance Corporation) receivership, with the government hoping to find a buyer.
In a separate call to venture clients on Friday, the CEO of Silicon Valley Bridge Bank Tim Mayopoulos addressed the filing while appearing to read from a script. “All the obligations of Silicon Valley Bridge Bank are backed by the FDIC and the full faith and credit of the U.S. government,” he said, reiterating that SVB Bank, SVB Securities, and SVB Capital are not included in the bankruptcy filing, as per the earlier statement. The wealth and private banking businesses are included in the bankruptcy filing.
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