Recent Bank Failure and Related Bankruptcy Resources

The financial services industry is experiencing shock waves following the recent Federal Deposit Insurance Corporation (FDIC) insured bank failures. At a rate unseen since the 2008 financial crisis, three regional banks have succumbed to liquidity challenges and were either placed into FDIC receivership, or voluntarily dissolved. 

ON MARCH 8, 2023, SILVERGATE CAPITAL CORPORATION (parent company of Silvergate Bank) decided to voluntarily liquidate. On March 10, 2023, California financial regulators stepped in and took possession of Silicon Valley Bank (SVB) and put it into FDIC receivership, in what was the largest failure of a U.S. bank since 2008. On March 12, 2023, New York financial regulators took possession of Signature Bank and put it into FDIC receivership. On March 17, 2023, SVB Financial Group (the former parent of SVB) filed a Chapter 11 in the Southern District of New York.

Attorneys across multiple practice areas are dealing with the fallout from these bank failures. Practical Guidance offers a resource kit that includes materials on bank failures and related issues, with detailed practice notes, templates, and checklists. It includes guidance in the Financial Services Regulation practice area related to the FDIC’s role in winding down or managing receivership of a failed institution and the federal laws and regulations governing effective risk management. In addition, related resource in the Finance practice area are designed to assist borrowers and lenders in commercial lending transactions in evaluating their potential exposure to these bank failures. Bankruptcy guidance and analysis provides various resources for dealing with distressed entities in relation to bank failures.

Review the complete Bank Failure Resource Kit here.