SVB Financial Group Files for Chapter 11 Bankruptcy Protection Following Takeover by FDIC

SVB Financial Group, the former parent of Silicon Valley Bank, has filed for Chapter 11 bankruptcy protection. The filing comes a week after the tech-reliant bank was shut down by regulators following a run on the financial institution that drove it into insolvency.

In a statement released Friday, SVB Financial said it is no longer affiliated with Silicon Valley Bank or its private banking and wealth management unit, SVB Private, following its takeover by the Federal Deposit Insurance Corporation. The bankruptcy filing does not include Silicon Valley Bank, SVB Securities, SVB Capital’s funds, or its general partner entities.

The filing comes after the company, its CEO, and its chief financial officer were targeted this week in a class action lawsuit that claims the company didn’t disclose the risks that future interest rate increases would have on its business.

The FDIC has taken over the successor of Silicon Valley Bank, Silicon Valley Bridge Bank, and is running it under its jurisdiction. Former FDIC chair Sheila Bair has commented on the turmoil in the banking sector, saying that the FDIC is “committed to ensuring that the banking system remains safe and sound and that the public’s deposits are protected.”

The FDIC has not yet released a statement on the bankruptcy filing, but it is expected to provide more information in the coming days.