Lawyers for the part of Silicon Valley Bank that has been put into bankruptcy protection accused US bank regulators of having “drained” roughly $2bn of cash from the institution, setting the stage for a fight that will decide how much investors, including Appaloosa and Pimco, recoup in the restructuring.
The remarks on Tuesday came at an opening hearing in the bankruptcy of SVB Financial — the unit of SVB that includes its investment banking and venture investing businesses — which filed for Chapter 11 protection last Friday.
The Federal Deposit Insurance Company took control of SVB’s commercial banking operations on March 10 after depositors attempted to withdraw $42bn from the lender, in the biggest bank failure since the Great Financial Crisis.