SVB Financial Group, the parent company of Silicon Valley Bank, on Friday sought bankruptcy protection as it aims to reorganize after the bank was seized last week by federal regulators.
The company said in a statement that funds from SVB Securities, a regulated broker-dealer, and SVB Capital, a venture capital and private credit fund platform, were not included in the Chapter 11 filing. Silicon Valley Bank, which the Federal Deposit Insurance Corporation took control of on March 10, was also not part of the filing.
“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,” William Kosturos, chief restructuring officer for SVB Financial Group, said Friday in a statement. “SVB Capital and SVB Securities continue to operate and serve clients, led by their longstanding and independent leadership teams.”
On Friday, SVB Financial Group said it had about $2.2 billion of liquidity. At the end of last year, it had $209 billion in assets, Reuters reported.
SVB Financial Group is eligible to file for bankruptcy to protect assets remaining after last week’s seizure and to help repay creditors, according to Bloomberg News. It gives the company a court-supervised process to help it find new owners for its business lines, The Wall Street Journal reported.
Silicon Valley Bank had been founded in 1983 and catered to technology startups and venture capitalists. The FDIC took control of it on Friday after customers rushed to pull their funds following news that it had sold $21 billion of securities at a $1.8 billion loss.
The incident marked the nation’s second-largest bank failure.
Washington Mutual filed for Chapter 11 protection after its Washington Mutual Bank collapsed in 2008, marking the largest bank failure in U.S. history, according to the Journal.