SVB Financial Group is suing the US Federal Deposit Insurance Corporation (FDIC) as it looks to recover $1.93 billion seized by the regulator when it took over the failed Silicon Valley Bank in March.
SVB Financial said the FDIC asserted it has claims against the company to justify its refusal to pay but has not identified a single claim “despite having numerous opportunities”, media reports cited filing in a bankruptcy court on Sunday.
The company said the FDIC violated bankruptcy rules by transferring funds and refusing to honour SVB Financials’ demand to be paid, Reuters reported. The FDIC did not immediately respond to Reuters' request for comment.
The company filed for bankruptcy in March after Silicon Valley Bank became the ward of the FDIC following a $42 bank run.
The holding company has bonds and preferred stock outstanding with a face value of $7 billion that are now largely held by various distressed-asset investors.
Ownership of the cash has been a central issue since the opening bankruptcy court hearing, in which one lawyer for SVB Financial accused the FDIC of having “drained” the $1.9 amount, according to a Financial Times report.
The cash balance, which is held in an account at its banking subsidiary, is described as “the most significant asset” of the SVB Financial estate, the FT said, citing the lawsuit filed in a New York federal bankruptcy court.
SVB Financial said that unless the FDIC returned the funds, it might have to seek external financing to pay for the case, a process which it described as potentially “costly and uncertain”.
“The Debtor’s lack of access to these Account Funds is impeding its ability to reorganise and causing harm to the Debtor on a continuous basis,” SVB Financial wrote in its lawsuit.
The holding company SVB Financial said that after the US Treasury Department invoked the so-called systemic risk exception to make it legal for the FDIC to insure Silicon Valley Bank deposits greater than $100,000, the parent company was entitled to access its cash on deposit at the seized banking subsidiary.
The FDIC in previous court appearances and court papers argued that it might have so-called offset rights to claim the parent company’s cash to satisfy potential liabilities.
At issue between the two sides is who in the interim gets to possess the cash, leaving one party to submit a claim to the other over what portion it believes must be rightfully handed back, the FT report said.
SVB Financial, the parent company of Silicon Valley Bank before it was seized, is attempting to sell its remaining assets in bankruptcy.
Last week, a US bankruptcy judge allowed the company to sell its investment banking business to a group led by the division’s former chief executive, Jeff Leerink and is backed by funds managed by the Baupost Group.
The deal includes an equity financing of up to $100 million from Baupost along with a $30 million financing commitment from Mr Leerink's team, Reuters cited a court filing as saying at the time.
The biog
Age: 59
From: Giza Governorate, Egypt
Family: A daughter, two sons and wife
Favourite tree: Ghaf
Runner up favourite tree: Frankincense
Favourite place on Sir Bani Yas Island: “I love all of Sir Bani Yas. Every spot of Sir Bani Yas, I love it.”
Company name: Play:Date
Launched: March 2017 on UAE Mother’s Day
Founder: Shamim Kassibawi
Based: Dubai with operations in the UAE and US
Sector: Tech
Size: 20 employees
Stage of funding: Seed
Investors: Three founders (two silent co-founders) and one venture capital fund
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
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The alternatives
• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.
• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.
• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.
• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.
• PayPal is probably the best-known online goods payment method - usually used for eBay purchases - but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.
Killing of Qassem Suleimani
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Zimbabwe v UAE, ODI series
All matches at the Harare Sports Club
- 1st ODI, Wednesday, April 10
- 2nd ODI, Friday, April 12
- 3rd ODI, Sunday, April 14
- 4th ODI, Sunday, April 16
Squads:
- UAE: Mohammed Naveed (captain), Rohan Mustafa, Ashfaq Ahmed, Shaiman Anwar, Mohammed Usman, CP Rizwan, Chirag Suri, Mohammed Boota, Ghulam Shabber, Sultan Ahmed, Imran Haider, Amir Hayat, Zahoor Khan, Qadeer Ahmed
- Zimbabwe: Peter Moor (captain), Solomon Mire, Brian Chari, Regis Chakabva, Sean Williams, Timycen Maruma, Sikandar Raza, Donald Tiripano, Kyle Jarvis, Tendai Chatara, Chris Mpofu, Craig Ervine, Brandon Mavuta, Ainsley Ndlovu, Tony Munyonga, Elton Chigumbura
Joker: Folie a Deux
Starring: Joaquin Phoenix, Lady Gaga, Brendan Gleeson
Director: Todd Phillips
Rating: 2/5
UAE%20set%20for%20Scotland%20series
%3Cp%3EThe%20UAE%20will%20host%20Scotland%20for%20a%20three-match%20T20I%20series%20at%20the%20Dubai%20International%20Stadium%20next%20month.%3Cbr%3EThe%20two%20sides%20will%20start%20their%20Cricket%20World%20Cup%20League%202%20campaigns%20with%20a%20tri-series%20also%20involving%20Canada%2C%20starting%20on%20January%2029.%3Cbr%3EThat%20series%20will%20be%20followed%20by%20a%20bilateral%20T20%20series%20on%20March%2011%2C%2013%20and%2014.%3C%2Fp%3E%0A
