SVB Financial Group Files for Bankruptcy to ‘Preserve Value’

Silicon Valley Bank

SVB Financial Group — the former parent company of Silicon Valley Bank — has filed for bankruptcy.

The Chapter 11 filing does not include SVB Securities and SVB Capital’s funds and general partner entities, SVB Financial Group said in a Friday (March 17) press release.

“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 Financial Group Chief Restructuring Officer William Kosturos said in the release. “SVB Capital and SVB Securities continue to operate and serve clients, led by their longstanding and independent leadership teams.

There is “significant interest” from potential buyers for SVB Capital and SVB Securities, and that SVB Financial Group is no longer affiliated with Silicon Valley Bank or SVB Private, the company said in the release.

The company added that it “believes” it has $2.2 billion of liquidity in addition to its interests in SVB Capital and SVB Securities, other investment securities accounts and other assets. It is seeking to sell these as well, per the release.

“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 the release.

It was reported Tuesday (March 14) that a group of creditors for SVB Financial Group were pushing the company to file for bankruptcy and sell off its non-bank businesses.

While regulators said the company’s stock is worthless, it also owns some potentially high-value assets, including its SVB Capital, which is an investment manager that oversees $9.5 billion, and SVB Securities, The Wall Street Journal reported at the time.

That report came a day after SVB Financial Group announced that its board of directors appointed a restructuring committee to explore strategic alternatives for the company, its SVB Capital and SVB Securities businesses, and its other assets and investments.

The Chapter 11 filing in the United States Bankruptcy Court for the Southern District of New York comes a week after SVB Financial Group’s former banking unit, Silicon Valley Bank, went under the receivership of the Federal Deposit Insurance Corporation (FDIC).