SVB Financial Group (SIVB) has filed for Chapter 11 Bankruptcy in the Southern District of New York, in an effort to protect what the company said is $2.2 billion of liquidity.
The bankruptcy comes days after the company's embattled bank subsidiary was taken over by regulators. Silicon Valley Bank, which now operates as Silicon Valley Bridge Bank, is not included in the bankruptcy filings. The company is also exploring other options for its brokerage, SVB Securities, and venture capital platform, SVB Capital, which are not included in the bankruptcy.
The bank, which was the primary focus for the parent company, failed March 10, after losing $2 billion on a portfolio of mainly U.S. Treasuries. The FDIC was named the receiver and shares were halted as customers pulled out their money and shares spiraled. The bank will continue to be controlled by the government.
The bankruptcy filing could be an effort to escape any civil litigation from creditors, the Wall Street Journal reported. It's not uncommon for parent company's of failed banks for file for bankruptcy, the paper reported.
SIVB's bankruptcy comes amidst fears of a deepening crisis in the global banking sector. Eleven banks came to a $30 billion rescue of First Republic Bank (FRC) Thursday, while global banking giant Credit Suisse (CS) tapped into a $54 billion lifeline from the Swiss National Bank a day prior.