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Tuesday, October 28, 2025
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SVB Financial Awaits $2 Billion Recovery from FDIC Amid Bankruptcy and Banking Crisis

SVB Financial, the former owner of the failed Silicon Valley Bank, is seeking to recover $2 billion in deposits held in receivership by the Federal Deposit Insurance Corp. (FDIC). However, according to bankruptcy court papers filed by the FDIC on May 3, SVB bondholders can only recover the cash through the receivership process.

SVB Financial Group declared bankruptcy in March, intending to use the process to preserve value while exploring alternatives for its other businesses, including SVB Securities and SVB Capital, which were not included in the Chapter 11 filing. The FDIC argues that once it claimed control of SVB, it also took ownership of all deposits in the bank, making SVB Financial’s claim a “”promise to pay”” from the bank.

The bankruptcy declaration came days after the FDIC took control of Silicon Valley Bank following a run on deposits that initiated an ongoing banking crisis. The effects of the collapse continue to impact the industry, with shares of other regional banks, such as PacWest Bancorp and Western Alliance, starting to slide as well.

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