SVB Financial commences Chapter 11 proceedings

Chicago, March 17 – SVB Financial Group filed a voluntary petition for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Southern District of New York, according to a press release on Friday morning.

Notably, SVB Securities and SVB Capital’s funds and general partner entities are not included in the filing and continue to operate in the ordinary course as SVB Financial explores strategic alternatives for those businesses.

SVB Securities (a regulated broker-dealer) and SVB Capital (a venture capital and private credit fund platform with “deep roots” in the innovation economy) are separate legal entities.

SVB Financial believes it has approximately $2.2 billion of liquidity. In addition to cash and its interests in SVB Securities and SVB Capital, the company says it has other valuable investment securities accounts and other assets for which it is also exploring strategic alternatives.

SVB Financial Group’s funded debt is about $3.3 billion principal amount of unsecured notes and the group also has $3.7 billion of preferred equity outstanding. For the sake of clarity, there is no claim for the notes against SVB Securities or SVB Capital.

The court-supervised process is being led by a five-member restructuring committee appointed by the SVB board or directors.

Centerview Partners LLC is assisting the restructuring committee with the strategic alternative process, which is already underway.

Any sale process will be conducted through the Chapter 11 proceeding and subject to court approval.

SVB Financial Group plans to file customary first-day motions with the bankruptcy court that, among other things, seek authorization to continue the operations of SVB Financial Group in the ordinary course of business as soon as a hearing can be scheduled.

Additional documents relating to the bankruptcy court proceeding will be filed in the coming days.

Noted in the press release, SVB Financial Group is no longer affiliated with Silicon Valley Bank, NA, or the bank’s private banking and wealth management business, SVB Private. The bank’s successor, Silicon Valley Bridge Bank, NA is operating under the jurisdiction of the Federal Deposit Insurance Corp. and is not included in the filing.

Centerview Partners LLC is proposed financial adviser, Sullivan & Cromwell LLP proposed legal counsel and Alvarez & Marsal proposed restructuring adviser to SVB Financial Group as debtor-in-possession.

The financial services and bank holding company is based in Santa Clara, Calif.

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