SVB Financial nears approval to sell its investment banking business

NEW YORK, June 29 (Reuters) – A U.S. bankruptcy judge said Thursday that he would allow SVB Financial Group to sell its investment banking division, once the company has ensured that it is not releasing any liabilities related to the collapse of its Silicon Valley Bank unit.
U.S. Bankruptcy Judge Martin Glenn in Manhattan said during a Thursday court hearing that he could not approve the sale of SVB Securities to a group led by the subsidiary’s former CEO Jeff Leerink and backed by funds managed by The Baupost Group, as initially proposed.
Glenn said he was unsure if Leerink and other executives had any actual liability, but he could not grant them sweeping legal protections without more evidence.
James Bromley, an attorney for SVB Financial, told Glenn that it would remove the liability releases from the deal by Friday. Glenn said he would likely approve the sale once he reviews the revised deal.
At the court hearing, Glenn chastised SVB Financial for not clearly explaining or justifying a provision in the deal that would have released Leerink and other insiders from any liability associated with Silicon Valley Bank’s collapse.