According to Cointelegraph, Silvergate Capital Corporation filed for Chapter 11 bankruptcy protection in the Delaware Bankruptcy Court of the United States. The company's assets are between $100 million and $500 million, and its liabilities are between $10 million and $50 million.
The bankruptcy filing includes two Silvergate affiliates, Silvergate Liquidation Corporation and Spring Valley Lots, LLC.
The reorganization plan proposes that administrative expenses, taxes and other senior debts be paid in full, while common stock and debt related to securities litigation will be cancelled. Intercompany debt will be reinstated, and preferred shareholders will receive partial payment based on their shares.
The bankruptcy filing comes 18 months after the crypto-friendly bank shut down operations due to liquidity issues. In March 2023, the parent company announced the voluntary liquidation of its subsidiary Silvergate Bank as the banking system faced rising interest rates and regulatory scrutiny.
That same month, the Federal Reserve dropped all charges against the bank, saying it had successfully wound down operations and repaid customers. The company was represented in bankruptcy by Richards, Layton & Finger and Cravath, Swaine & Moore LLP, with AlixPartners serving as financial advisor.
