The struggling tech-supporting bank officially announced filing for a “court-supervised reorganization under Chapter 11” a week after its shares were halted and the FDIC had to intervene.
This comes amid BTC’s latest price push that drove it to a multi-month high at $27,000.
The California-based bank outlined the latest developments in a PR from today, indicating that the filing was sent to the US Bankruptcy Court for the Southern District of New York.
SVB Financial Group said the funds of SVB Securities and SVB Capital, as well as general partner entities, were not included in the Chapter 11 filing. They continue to operate “in the ordinary course.”
“SVB Financial Group is no longer affiliated with Silicon Valley Bank, N.A., or the bank’s private banking and wealth management business, SVB Private. The bank’s successor, Silicon Valley Bridge Bank, N.A., is operating under the jurisdiction of the Federal Deposit Insurance Corporation (“FDIC”) and is not included in the Chapter 11 filing.” – reads the PR.
SVB Financial Group claimed that it has $2.2 billion of liquidity as well as additional cash and interests in SVB Capital and SVB Securities, which it will use to explore “strategic alternatives.” Its debt is believed to be $3.3 billion in “aggregate principal amount of unsecured notes, which are only recourse to SVB Financial Group.”
“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. SVB Capital and SVB Securities continue to operate and serve clients, led by their longstanding and independent leadership teams.” – commented William Kosturos, Chief Restructuring Officer for SVB Financial Group.
The bank’s issues became known last week when it announced the sale of billions of dollars worth from its portfolio, realizing a loss of $1.8 billion. As its stock tumbled, the FDIC had to intervene and halt trading.
Since then, a few more US banks have come under the spotlight with similar issues, while reports emerged that several watchdogs will launch a probe into SVB.
The struggling banking system has benefited bitcoin and the rest of the crypto market. BTC soared to $27,000 today for the first time since June 2022.
Here you can see which crypto companies had some sort of exposure to SVB as well as Signature Bank – another struggling banking organization.
Featured Image Courtesy of Bloomberg
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This article has been originally published at: https://cryptopotato.com/svb-financial-group-files-for-chapter-11-bankruptcy-protection-as-btc-tapped-27k/