The move would protect its remaining assets and allow it to work on repaying creditors, including bondholders
John Brecher—The Washington Post/Getty Imagesilicon Valley Bank’s parent company filed for bankruptcy after worry spread among its long-established customer base of tech startups, prompting regulators to seize the firm’s banking unit.
Because Silicon Valley Bank is a California-chartered commercial bank and part of the Federal Reserve system, it is not eligible for bankruptcy and landed in Federal Deposit Insurance Corp. receivership instead. Its parent company, however, is eligible to file in order to protect its remaining assets and work on repaying creditors, including bondholders.
Santa Clara, California-based SVB is the biggest bank to fail in more than a decade, with about $209 billion in total assets as of the end of last year, the FDIC said. It’s also the second largest bank to fall under the agency’s receivership, behind only Washington Mutual Inc., which imploded in 2008.
Silicon Valley Bank was founded in 1983 over a poker game between Bill Biggerstaff and Robert Medearis, according to a statement from the bank’s 20th anniversary. Since its start, the firm has specialized in providing financial services to tech startups.
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