The parent company of Silicon Valley Bank (SVB), SVB Financial Group, filed for Chapter 11 bankruptcy just a week after the Valley’s main banking institution suffered a bank run.
SVB’s assets were confiscated by US authorities after depositors, including portfolio businesses of Peter Theil’s Founders Fund and other major players, began withdrawing their funds from the bank.
Apart from SVB, SVB Finance owns a number of additional businesses. SVB Capital, an investment manager, and SVB Securities, a brokerage firm, are among them. According to the media reports, the bankruptcy petition will start a judicial procedure in which the institution will auction off SVB Financial Group’s other businesses.
The present bankruptcy proceedings differ from the one being conducted by the Federal Deposit Insurance Corporation (FDIC) to refund SVB depositors. SVB Financial claims to have USD 2.2 billion in liquid assets.
The FDIC guaranteed depositors that their money will be repaid on March 12. While the institution did not specify a timetable for the return, it did provide some solace to the distraught customers.
In a joint statement by secretary of the Treasury, Federal Reserve and FDIC said, “Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”