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- SVB Financial filed for Chapter 11 bankruptcy protection on Friday.
- It came a week after regulators shut down Silicon Valley Bank.
- The bank remains under FDIC control, while SVB will seek new owners for its other units.
SVB Financial Group filed for Chapter 11 bankruptcy protection on Friday, seeking a court-supervised reorganization to help find buyers for its assets.
It comes a week after Silicon Valley Bank, once SVB's main business, was shut down by regulators and placed under the FDIC's control.
The bankruptcy filing doesn't include its other businesses, namely investment manager SVB Capital and investment bank SVB Securities. But during the bankruptcy process, SVB can seek new owners for those units.
"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," said William Kosturos, chief restructuring officer for SVB Financial. "SVB Capital and SVB Securities continue to operate and serve clients, led by their longstanding and independent leadership teams."
SVB Financial estimates that it has around $2.2 billion in liquidity, $3.3 billion in bond debt, and $3.7 billion in preferred stock, according to a press release.
Earlier this week, SVB Financial had indicated a readiness to seek bankruptcy protection.
Meanwhile, the unwinding of Silicon Valley Bank continues separately under FDIC supervision. The FDIC, Federal Reserve, and Treasury Department have already guaranteed all deposits at the bank, which is now called Silicon Valley Bridge Bank and is not part of SVB's bankruptcy filing.
Kosturos said SVB Financial will continue to work cooperatively with Silicon Valley Bridge Bank, according to the statement.
"We are committed to finding practical solutions to maximize the recoverable value for stakeholders of both entities," he said.
But any proceeds that SVB Financial generates from the sale of its remaining businesses could be a matter of dispute.
While SVB's creditors will look to recoup losses, the FDIC could also try to claim that proceeds may need to cover losses at the bank.
The FDIC also is looking for a buyer of the bank as well. After an auction failed over the week, it's reportedly planning to hold another one.