SVB Financial Group has sued the US Federal Deposit Insurance Corporation in a bid to recover $1.9bn in cash that the regulator has kept since it took over the group’s banking subsidiary in March.
SVB Financial Group, a parent holding company, filed for bankruptcy in March after Silicon Valley Bank became the ward of the FDIC following a $42bn bank run. SVB Financial said retention of the cash by the FDIC violated US bankruptcy law.
The holding company has bonds and preferred stock outstanding with a face value of $7bn that are now largely held by various distressed-asset investors. Ownership of the cash has been a central issue since the opening bankruptcy court hearing, in which one lawyer for SVB Financial accused the FDIC of having “drained” the $1.9bn amount.