SVB Financial files for Chapter 11 bankruptcy in New York

The Silicon Valley Bank Financial Group filed for Chapter 11 bankruptcy protection on Friday, days after the bank was taken over by the US regulators.

The bank filed a voluntary petition for a court-supervised reorganisation under Chapter 11 in the United States Bankruptcy Court for the Southern District of New York to seek buyers for its assets.

This comes days after the bank on March 13 said it was planning to explore strategic alternatives for its businesses, including the holding company, SVB Capital and SVB Securities.

However, SVB Securities and SVB Capital's funds and general partner entities are not included in the Chapter 11 filing, the company said in a statement.

The collapse of SVB was said to be the biggest financial crisis since the Global Financial Crisis of 2008. It led to a panic as immediate working capital concerns pinched start-ups all over the world.

At least a dozen India-born SaaS unicorns—and several other B2B start-ups—are headquartered in the US and have subsidiaries elsewhere in the world. Most early- to mid-stage start-ups typically put all their monies into SVB accounts as soon as they raise venture funding.

What is Chapter 11 Bankruptcy?

Chapter 11 of the Bankruptcy Code generally provides for reorganization, usually involving a corporation or partnership. A chapter 11 debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time. People in business or individuals can also seek relief in chapter 11.

Read: Silicon Valley Bank collapse: What lies ahead for start-up ecosystem after SVB?