Below is a brief synopsis of the failures of Silicon Valley Bank (“SVB”) and Signature Bank, NA (“Signature Bank”) and the actions taken by the U.S. government in response to these failures.

Silicon Valley Bank (California)

On March 10, 2023, the California Department of Financial Protection and Innovation closed SVB and appointed the Federal Deposit Insurance Corporation (“FDIC”) as its Receiver (the FDIC acting in such capacity, “Receiver”).

The Receiver subsequently organized Silicon Valley Bridge Bank, NA (“SV Bridge Bank”). A “bridge bank” is a bank chartered by the Office of the Comptroller of the Currency and temporarily owned and operated by the FDIC to bridge the time between the date of failure of bank and the date of sale of the failed to an acquiring institution. A detailed discussion of bank failures and bridge banks may be found here.

On March 13, 2023, the FDIC posted an email on its website that confirmed that SV Bridge Bank is open and operating and, on the same day, the Receiver and SV Bridge Bank executed a Transfer Agreement (“SVB Transfer Agreement”) whereby (1) the Receiver transferred certain liabilities, including certain deposit liabilities, and (2) contributed certain assets of SVB to SV Bridge Bank, and SV Bridge Bank accepted and assumed such liabilities and assets in the manner and on the terms and conditions more fully set forth therein. A copy of the SVB Transfer Agreement may be found here.

On the evening of Monday, March 13, 2023, SV Bridge Bank’s new CEO, Tim Mayopoulas, emailed a letter to clients confirming that SV Bridge Bank was open and operating, and on Tuesday, March 14, 2023, he posted a message on the SVB website stating that SV Bridge Bank has “fully stepped into the shoes of the former Silicon Valley Bank.” The post went on to provide that:

1. All loan positions, including as lender, issuing bank, administrative agent and any other function that was formerly performed by SVB has now been assumed by SV Bridge Bank;
2. All commitments to advance under existing credit agreements will be honored in accordance with and pursuant to the terms thereof;
3. Any other duties or roles under existing credit agreements will be performed by SV Bridge Bank. in accordance with and pursuant to the terms thereof;
4. SV Bridge Bank is not in FDIC receivership;
5. All counterparties of SVB may transact with, settle transactions and otherwise conduct business with SV Bridge Bank; and
6. SV Bridge Bank has assumed the obligations and commitments of SVB.

As SV Bridge Bank continues to ramp up operations, we expect additional information for depositors and counterparties will be forthcoming.

Signature Bank, NA (New York)

On March 12, 2023, the New York State Department of Financial Services closed Signature Bank and appointed the FDIC as its Receiver. FDIC Bank Closing Information for Signature Bank may be found here. As was the case with SVB, the FDIC organized a Signature Bridge Bank, NA (“Signature Bridge Bank”), and the FDIC and Signature Bridge Bank entered into a Transfer Agreement in substantially similar form to the SVB Transfer Agreement whereby certain assets of Signature Bank were transferred to Signature Bridge Bank and Signature Bridge Bank assumed certain assets and liabilities thereunder. A copy of the Signature Bank Transfer Agreement may be found here.

Given the unprecedented speed with which SVB and Signature Bank failed, the situation is changing multiple times each day (in certain cases, hourly) and will continue to evolve over the coming days and weeks. We are continuing to closely monitor these developments and the impacts of the SVB/Signature Bank receiverships on commercial lending transactions, real estate transactions, fund transaction and other commercial transactions. We will provide updates as new information becomes available.