SVB Financial Group, the parent firm of Silicon Valley Bank (SVB), filed for Chapter 11 bankruptcy about a week after the Valley’s key financial institution faced a bank run.
The US authorities seized SVB’s assets when depositors, including portfolio companies of Peter Theil’s Founders Fund, among other big players, started withdrawing their deposits from the bank.
SVB Financial owns multiple other businesses, apart from SVB. These include SVB Capital, an investment manager, and brokerage firm SVB Securities. The bankruptcy filing will trigger a court process as the institution will auction off SVB Financial Group’s other business, according to a report by New York Times.
The current bankruptcy proceedings are different from the one led by the Federal Deposit Insurance Corporation (FDIC) to repay the depositors of SVB. SVB Financial claims to have $2.2 billion worth of liquidity.
On March 12, the FDIC promised depositors that their money would be returned. While the institution did not provide a timeline for the return, it did provide some relief to the frantic consumers.
“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,” a joint statement by the Secretary of the Treasury, Federal Reserve and FDIC said.