SVB Financial Group Challenges FDIC’s ‘Arbitrary’ Denial of $1.9B Account Claim

Relevant Document: Complaint SVB Financial Group, or SVBFG, filed a complaint yesterday, Tuesday, Dec. 19, in the Northern District of California challenging the FDIC-C’s administrative denial of its demand to recover approximately $1.93 billion of account funds formerly held in accounts at Silicon Valley Bank, or SVB. The complaint parallels the debtor’s turnover complaint in its chapter 11 case. In both suits, the debtor asserts that it is entitled to its full deposit account balance under the protection of the “systemic risk exception,” which was invoked by Secretary of Treasury Janet Yellen in conjunction with the FDIC and the Executive Branch after SVB’s failure in the face of a bank run in March. The eight count complaint asserts claims for declaratory judgment, violation of the automatic stay and turnover of funds pursuant to the Bankruptcy Code, estoppel, FOIA violations, due process violations and review under the APA, as well as claims for pre- and post-judgment interest and attorneys’ fees. According to the complaint, the FDIC’s freezing of the debtor’s accounts at SVB “was tantamount to theft, and was contrary to its public assurances that all depositors’ funds at Bridge Bank were safe.” The debtor argues that the Treasury secretary’s decision[...]