SVB Financial Group, the parent company for California tech lender Silicon Valley Bank (SVB), filed for Chapter 11 bankruptcy protection in New York Friday, the biggest filing of its kind since Washington Mutual Inc. in 2008.
SVB, which was SVB Financial Group’s main business, was taken over by federal regulators after it collapsed due to a bank run last week, with the Federal Reserve intervening to insure depositors. The bank announced it was filing for bankruptcy Friday in a bid to preserve the value of its assets.
“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 a statement. “SVB Capital and SVB Securities continue to operate and serve clients, led by their longstanding and independent leadership teams.”
SVB is under the jurisdiction of the Federal Deposit Insurance Corporation and not included in the Chapter 11 filing, according to The Washington Post. Bankruptcy offers a court-supervised reorganization to assist SVB Financial Group to find buyers for its assets besides SVB because it is under federal control, according to Reuters.
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