It’s been more than seven months since the Federal Reserve shut down Silicon Valley Bank and orchestrated its sale to First Citizens Bank out of North Carolina. And since then, a small committee has been hard at work trying to uncover exactly what happened.
Long after the Federal Reserve published its initial report in April, detailing failures of senior management and SVB’s board of directors, a small committee that is representing shareholders of SVB’s former parent, SVB Financial Group, in its ongoing bankruptcy proceedings has for months been hunting down any records and communication from SVB executives, consultants, and vendors who may have relevant information, according to hundreds of bankruptcy documents filed this year and reviewed by Fortune.
Since June, the Committee has subpoenaed information from everyone from McKinsey, Curinos, and BlackRock—which had drafted up reports for the company—as well as SVB’s former auditor Ernst & Young. Goldman Sachs, which had helped SVB with a proposed capital raise in March 2023 and ultimately purchased SVB’s securities portfolio, has also been subpoenaed, according to bankruptcy filings. And just this week, bankruptcy judge Martin Glenn granted the Committee approval to retrieve communication and documents from an additional 11 individuals who served in senior roles at SVB, including its former head of enterprise risk management, chief compliance officer, treasurer, and director of liquidity risk management.
The Committee has sent out detailed requests, asking for information regarding everything from what SVB management had referred to as “Project Phoenix” (an internal reference to discussions on potential bond portfolio sales) to information on the resignation of SVB’s Chief Risk Officer.
"We do understand why the Committee is asking questions of various companies that may have worked for SVB in the past. As their review continues, we will respond as appropriate to questions they may have of us," a Curinos spokeswoman said in statement to Fortune. BlackRock declined to comment. McKinsey, E&Y, and Goldman Sachs didn't return a request for comment before press time.
The underlying goal of the Committee’s ongoing investigation is to make “informed decisions” about what to do with the bankruptcy estate assets, and identify which “claims should be settled, abandoned, or otherwise treated under a plan,” according to the Committee’s initial motion to the Judge, asking for subpoena authority. None of the documents that have surfaced in discovery have been made publicly available.
In its report earlier this year, the Federal Reserve had placed most of the blame on the bank’s board and senior management—laying out a "textbook case" of failure to manage basic interest rate and liquidity risk as well as details including how the bank paid out its annual performance bonuses to executives and senior staff the same day regulators seized the bank.
It’s possible this Committee might determine that other parties or individuals should shoulder some of that blame. In the meantime, the Committee has plenty of paperwork to keep them busy for some time.
See you tomorrow,
Joe Abrams curated the deals section of today’s newsletter.