According to documents filed on Sunday, March 19, the parent firm of Silicon Valley Bank, SVB Financial, has lost access to its financial records. The firm lost its access after the bank was placed into receivership by the FDIC (Federal Deposit Insurance Corporation).
SVB Financial is looking into possibilities for its venture capital and investment banking businesses, including a potential bankruptcy sale. The FDIC’s takeover does not apply to these platforms. However, due to a breakdown in communication with the bridge bank established to take over SVB’s operations, its Chapter 11 bankruptcy has experienced a “difficult” start. The declaration was filed by SVB Financial Chief Restructuring Officer William Kosturos.
Furthermore, Silicon Valley Bank’s parent firm does not have its employees. Kosturos claimed that the new bank’s staff “shut off access” to several files. These include SVB Financial’s “books, records, files, electronic systems, and key employees.”
Silicon Valley Bank to be sold
The FDIC is trying to sell the failed bank and may seek to split up the failing lender. According to court filings, the FDIC receivership eliminated SVB Financial’s main source of funding. The receivership also removed most of the bank‘s corporate infrastructure, and also caused debt defaults, pushing the company into bankruptcy.
Additionally, there were $19 billion in assets and $2.2 billion in cash and cash equivalents. Moreover, the court documents reveal $3.4 billion in liabilities. Furthermore, over $15.5 billion of SVB Financial’s asset value was the SVB banking operation that was taken over by authorities.
According to Kosturos’ declaration, the company’s venture capital and credit investment division, SVB Capital, handles around $9.5 billion in capital from other investors, split across 30 pooled investment funds.
SVB Financial made a number of motions on Sunday, in an effort to keep its business running smoothly. The firm requested to keep its current bank accounts and to continue paying SVB workers for their services.