Judge Rules FDIC Sole Owner Of Silicon Valley Bank’s $73 Million Recovery Claim
By CU Today Staff —
WASHINGTON—The Federal Deposit Insurance Corp., acting as receiver for the failed Silicon Valley Bank, is the sole owner of the bank’s claim for insurance coverage tied to a $73 million fraud scheme and is entitled to recover any proceeds related to losses suffered by the institution, a federal judge in North Carolina has ruled, Law360 said.
The decision rejects competing claims to the insurance recovery and reinforces the FDIC’s authority to pursue assets and legal claims belonging to failed banks once they enter receivership. The ruling stems from litigation involving losses tied to an alleged fraudulent scheme that cost Silicon Valley Bank approximately $73 million before its March 2023 collapse, Law360 said.
Silicon Valley Bank was seized by regulators on March 10, 2023, in one of the largest bank failures in U.S. history. The FDIC subsequently established Silicon Valley Bridge Bank and later sold most of the institution’s deposits and loans to First Citizens Bank, while retaining certain assets and claims in the receivership estate.
The North Carolina ruling is the latest in a series of legal battles involving SVB-related assets and claims following the bank’s collapse. Courts have generally recognized the FDIC’s broad authority as receiver to control and pursue claims belonging to the failed institution, including litigation and insurance recoveries that could help offset losses to the Deposit Insurance Fund, Law360 noted.
Originally reported by CU Today.