SVB Financial Plan Violates High Court’s Purdue Ruling, DOJ Says

SVB Financial Group’s reorganization plan exceeds the scope of bankruptcy law and violates the US Supreme Court’s recent ruling that forbids nonconsensual, third-party litigation releases, the government said.

The bankrupt former parent of Silicon Valley Bank proposed an amended plan last week, which added a group of holders of senior notes and preferred stock to its list of parties protected against litigation related to the bankruptcy. The group includes a unit of investment management giant Citadel LP.

The inclusion of those parties, without the consent of creditors, violates the high court’s June ruling rejecting such releases for Purdue Pharma’s Sackler ...