Silicon Valley Bank Financial Group filed for Chapter 11 bankruptcy protection on Friday, just days after the bank was taken...
Digital Desk: Silicon Valley Bank Financial Group filed for Chapter 11 bankruptcy protection on Friday, just days after the bank was taken over by US regulators.
In order to find buyers for its assets, the bank submitted a voluntary petition for a court-supervised reorganization under Chapter 11 in the United States Bankruptcy Court for the Southern District of New York.
This comes just days after the bank announced on March 13 that it would investigate strategic options for its businesses, including the holding company, SVB Capital, and SVB Securities.
However, SVB Securities and SVB Capital's funds and general partner companies are not included in the Chapter 11 filing, the company said in a statement.
The failure of SVB was described as the worst financial catastrophe since the 2008 Global Financial catastrophe. It caused a panic as start-ups all over the world sought immediate working capital.
At least a dozen India-born SaaS unicorns, as well as a number of other B2B start-ups, are headquartered in the United States and have subsidiaries around the globe. Most early- to mid-stage start-ups deposit all of their funds into SVB accounts as soon as they raise venture capital.
What is Chapter 11 Bankruptcy?
Chapter 11 of the Bankruptcy Code typically allows for reorganization, which usually involves a corporation or partnership. A chapter 11 debtor typically offers a reorganization plan to continue operating its company and pay creditors over time. Individuals or businesses can also seek protection under Chapter 11.
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