SVB Financial Has to Fight Over Billions Outside of Bankruptcy

SVB Financial Group, the bankrupt former parent of Silicon Valley Bank, will have to fight for about $2 billion seized by the Federal Deposit Insurance Corp. outside of bankruptcy court.

Who legally owns the sum — which makes up the majority of the bankrupt former parent company’s cash — goes beyond bankruptcy law, and as a result should be handled in district court, US District Judge John Cronan said in a Wednesday order.

When the bank failed in March, the FDIC guaranteed all deposits at SVB, but later cut off the parent company’s access to its own deposits. ...