SVB Financial, the parent company of the failed Silicon Valley Bank (SVB), has lost access to its financial records after the bank was placed into receivership by the Federal Deposit Insurance Corporation (FDIC), said a report by Reuters.
SVB Financial is currently exploring the possibility of a bankruptcy sale for its venture capital and investment banking divisions, which were not incorporated in the FDIC’s takeover of SVB. However, the company’s Chapter 11 bankruptcy proceedings have faced significant challenges due to lack of co-operation, with the bridge bank established to assume control of SVB’s operations, as stated in a declaration submitted on Sunday by SVB Financial’s Chief Restructuring Officer, William Kosturos, in a US bankruptcy court.
SVB Financial is trying to re-establish access to its “books, records, files, electronic systems, and key employees,” after they were “cut-off”, Kosturos said.
SVB financial filed for a court-supervised reorganisation to seek buyers for its assets on Friday after the Silicon Valley Bank was taken over by US regulators.
SVB Financial held $19 billion in assets, $2.2 billion in cash and cash equivalents, and $3.4 billion in liabilities. About $15.5 billion of SVB Financial’s asset value was attributed to the SVB banking business that was seized after California banking regulators closed the bank in the largest US bank failure since the 2008 financial crisis.
The FDIC receivership removed SVB Financial’s primary source of liquidity and most of its business infrastructure, as well as triggering defaults on SVB Financial’s debt, forcing the company into bankruptcy, according to court documents.
In its court filings on Sunday, SVB Financial also made several requests to continue operation during its restructuring process such as seeking permission to hold its existing bank accounts and to continue paying for services provided by SVB employees.
SVB Securities and SVB Capital’s funds and general partner entities are not included in the Chapter 11 filing, the company said in a statement.
