Bank / Credit Union

SVB parent sues FDIC to recover $1.9B in seized assets

gguy - stock.adobe.com

July 11, 2023

SVB Financial Group, the parent company of the failed Silicon Valley Bank, has sued the Federal Deposit Insurance Corp. for $1.9 billion that the agency seized in March. The company claims the FDIC hasn't given a reason for why the money shouldn't be returned, according to a report by Yahoo! Finance.

The FDIC seized SVB on March 10 when depositors took out $42 billion in one day. SVB Financial Group claims the FDIC is preventing the estate from reorganizing without the funds.

"By refusing to pay the debtor the account funds, the FDIC has violated, and is continuing to violate, both the bankruptcy code and the 'systemic risk exception,'" according to the filing. "The account funds should be generating more than $100 million in annual interest for the estate at current rates. Without immediate payment of the account funds, the debtor likely will have to obtain costly and uncertain debtor-in-possession financing."

SVB Financial Group appointed a restructuring group in March to consider alternatives for its capital and securities businesses which were not a part of SVB.