: SVB Financial files for Chapter 11 bankruptcy with about $2.2 billion of liquidity


SVB Financial Group said Friday it has filed for Chapter 11 bankruptcy in New York and will seek a court-supervised reorganization.

The move affects the SVB holding company but not Silicon Valley Bank, which is no longer affiliated with SVB SIVB, -60.41% after it was placed in receivership last week following a run on its deposits.

SVB said in a Friday morning release that SVB Securities and SVB Capital are not included in the Chapter 11 filing, as those businesses continue their operations. The company previously announced that it planned to look into strategic alternatives for those units, which it dubbed “valuable businesses” in Friday’s release.

The company believes it has about $2.2 billion of liquidity.

“In addition to cash and its interests in SVB Capital and SVB Securities, SVB Financial Group has other valuable investment securities accounts and other assets for which it is also exploring strategic alternatives,” the company said in a statement.

Its funded debt is about $3.3 billion and it has $3.7 billion of preferred equity.

“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 in the statement.

Kosturos led restructuring efforts for Washington Mutual in 2008.

The filing was made in the U.S. Bankruptcy Court for the Southern District of New York.

SVB Financial’s stock has been halted since last week.

The company’s March 8 disclosure of large losses from securities sales and a planned stock offering rocked the financial sector, fueling investor fears about regional banks. Silvergate Bank and Signature Bank have also failed this month.

Eleven major U.S. banks pledged $30 billion in total uninsured deposits into First Republic Bank FRC, -32.80% Thursday in an attempt to prevent another collapse.

This article was originally published by Marketwatch.com. Read the original article here.

Previous articleThe Big Move: ‘I’ve inherited a house from my deceased aunt in San Francisco. She rented the basement to an older couple for years without a lease.’ Can I evict them?
Next articleMarketWatch: UBS and regulators rush to seal Credit Suisse takeover deal possibly by Sunday: reports


Please enter your comment!
Please enter your name here