Days after its former subsidiary Silicon Valley Bank was taken over by American regulators, SVB Financial Group announced on Friday that it had filed for a court-supervised reorganization under Chapter 11 bankruptcy protection to seek buyers for its assets.
The decision to start bankruptcy proceedings was made as a result of the failure of immediate measures to boost confidence to allay concerns about a financial contagion.
Big American banks' stock prices declined between 1.5% and 2% on Friday in premarket trading.
Silicon Valley Bank was shut down by Californian regulators last Friday, making it the biggest collapse since Washington Mutual failed during the 2008 financial crisis.
The tech lender was compelled by an increase in yields to sell a portfolio of treasuries and mortgage-backed securities to Goldman Sachs at a $1.8 billion loss.
In an effort to close the gap, $2.25 billion in common equity and preferred convertible stock were offered, but worried customers withdrew their deposits, causing the bank to lose $42 billion in a single day.
The defunct lender announced earlier this week that it intended to investigate strategic alternatives for all of its entities, including the holding company, SVB Capital, and SVB Securities.
The company stated on Friday that the funds and general partner entities of SVB Securities and SVB Capital were not included in the Chapter 11 filing and that it still intended to move forward with the process of evaluating alternatives for the businesses as well as its other assets and investments.
On Wednesday, media outlets reported that the parent company was considering looking for bankruptcy protection in order to sell assets.
The business reported having about $2.2 billion in liquid assets on Friday. At the end of the previous year, it had $209 billion in assets.
(Source:www.usnews.com)
The decision to start bankruptcy proceedings was made as a result of the failure of immediate measures to boost confidence to allay concerns about a financial contagion.
Big American banks' stock prices declined between 1.5% and 2% on Friday in premarket trading.
Silicon Valley Bank was shut down by Californian regulators last Friday, making it the biggest collapse since Washington Mutual failed during the 2008 financial crisis.
The tech lender was compelled by an increase in yields to sell a portfolio of treasuries and mortgage-backed securities to Goldman Sachs at a $1.8 billion loss.
In an effort to close the gap, $2.25 billion in common equity and preferred convertible stock were offered, but worried customers withdrew their deposits, causing the bank to lose $42 billion in a single day.
The defunct lender announced earlier this week that it intended to investigate strategic alternatives for all of its entities, including the holding company, SVB Capital, and SVB Securities.
The company stated on Friday that the funds and general partner entities of SVB Securities and SVB Capital were not included in the Chapter 11 filing and that it still intended to move forward with the process of evaluating alternatives for the businesses as well as its other assets and investments.
On Wednesday, media outlets reported that the parent company was considering looking for bankruptcy protection in order to sell assets.
The business reported having about $2.2 billion in liquid assets on Friday. At the end of the previous year, it had $209 billion in assets.
(Source:www.usnews.com)
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