The parent firm of Silicon Valley Bank is announcing that it is filing for bankruptcy as the price of Bitcoin (BTC) skyrockets 30% in a week.
In a new press release, the SVB Financial Group, the conglomerate that owns SVB, says it’s going to file for Chapter 11 bankruptcy as a means of preserving value.
Though other parts of the corporation, such as SVB Capital and SVB Securities are healthy, the group decided to file for bankruptcy as it does not have enough liquidity to cover SVB’s debt.
“SVB Financial Group today announced that it has filed a voluntary petition for a court-supervised reorganization under Chapter 11 in the United States Bankruptcy Court for the Southern District of New York to preserve value.
SVB Securities and SVB Capital’s funds and general partner entities are not included in the Chapter 11 filing and continue to operate in the ordinary course as SVB Financial Group proceeds with its previously announced exploration of strategic alternatives for these valuable businesses.”
The firm says it filed for bankruptcy so it wouldn’t have to plunder the assets of its other subsidiaries to pay off SVB’s debt.
As stated by William Kosturos, chief restructuring officer for SVB Financial Group, in the press release,
“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.”
SVB’s troubles began last week as the contagion spread to other banks. Turmoil in the banking sector sent the king crypto flying as BTC went from around $19,500 on March 10th to its current price of $26,387, a 30% increase.
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