Bankruptcy Judge Reportedly Approves Sale of SVB Financial Group’s Investment Bank

A bankruptcy judge has reportedly approved the sale of SVB Financial Group’s investment bank to its managers.

SVB Financial Group, the bankrupt former owner of Silicon Valley Bank, bought Leerink Financial Partners in 2019 for $280 million, renamed it SVB Securities and can now sell the unit to its managers. 

Together with other members of the unit’s management team, the buyers include Jeff Leerink, who founded the company and ran it after it had been acquired. The buyers are investing $100 million in the firm, which includes a cash payout of $55 million and transaction fees, according to a Leerink Partners spokesperson. In addition to the payout, SVBFG will share 5% of any profits distributed to investors going forward.

The bankruptcy judge had refused to approve the sale, saying it would free too many executives from potential lawsuits around the bank’s collapse, but approved the sale after company officials modified the legal releases, a Bloomberg report said Wednesday (July 5).

The management team bidder group’s plans to acquire SVB Securities were announced June 18, with a note that the transaction was subject to final confirmation from the bankruptcy court and other customary closing conditions.

The investment bank will be rebranded as Leerink Partners and will focus on healthcare, the group said at the time. The deal does not include SVB Securities’ research arm, MoffettNathanson.

“The management team and I are excited to return to our heritage of owning and leading the premier healthcare investment bank and relaunching the business under the trusted Leerink Partners brand,” Leerink, who will be chairman and CEO of the firm, said when announcing the planned acquisition. “Our firm has been a strategic adviser to our corporate and investor clients for almost three decades and this transaction allows us to continue to provide our healthcare clients with the highest quality advice and execution services they have come to expect for their M&A [mergers and acquisitions], capital raising and investment needs.”

SVB Financial Group filed for bankruptcy in March, one week after Silicon Valley Bank was taken over by regulators. The Chapter 11 filing did not include SVB Securities and SVB Capital’s funds and general partner entities, the company noted at the time.

The March 10 collapse of Silicon Valley Bank was one of the biggest bank failures in U.S. history and started runs at other regional lenders.