SVB Financial seeks bankruptcy protection for reorganization

SVB Financial Group filed for a court-supervised restructuring under Chapter 11 bankruptcy protection on Friday to seek purchasers for its assets, only days after its former affiliate Silicon Valley Bank was taken over by US regulators.

The decision to seek bankruptcy protection comes after the company announced on March 13 that it would investigate strategic alternatives for its companies.

Shares of big U.S. banks fell more than 1.5% in premarket trading. Regional banks including PacWest Bancorp and First Republic Bank were down between 10% and 20%.

SVB Securities and SVB Capital’s funds and general partner entities are not included in the Chapter 11 filing and the company said it planned to proceed with the process to evaluate alternatives for the businesses, as well its other assets and investments.

Reuters reported on Wednesday that the parent company was exploring seeking bankruptcy protection for selling assets.

Californian regulators shuttered Silicon Valley Bank last Friday, making it the largest collapse since Washington Mutual went bust during the financial crisis of 2008.

The collapse crippled bank stocks and triggered concerns of a contagion throughout global markets.