4 ms·

The large majority of accounts at SVB were held by businesses. The businesses need to make payroll. The problem is businesses not making payroll for their staff

The large majority of accounts at SVB were held by businesses. The businesses need to make payroll. The problem is businesses not making payroll for their staff.

luckylion 4y ago
They'll certainly get bridge loans to handle that if they're fiscally sound. And there's no indication that "there's nothing left, and everyone has lost everything above $250k", it'll just take a while, and they might lose a few %.
startupsfail 4y ago
There are these $40b dollars that were transferred from the bank during bank run? Can maybe the the VCs responsible for the bunk run step in and pitch in 5% from that to fund the payroll?
- JumpCrisscross 4y ago
  SVB claims are trading around 60¢ on the dollar. Nobody should be more than a few days delayed on near-term payroll.
  - johnbellone 4y ago
    Are uninsured deposits going to only receive 60¢ on the dollar?
    - dmurray 4y ago
      The smart money (the people buying at 60c) presumably expects them to receive quite a bit more. Those selling at 60c are generally doing so because they are desperate for the cashflow. Likely the number will go up as more cautious/less nimble entities are able to evaluate the trade and decide they can buy the claims at a higher price. I'd bet on 80%+ probability of uninsured depositors getting back 100c on the dollar, 99% they get back at least 60c on the dollar.
    - kasey_junk 4y ago
      During IndyMac, widely considered the worst bank failure in the fdic regime, uninsured depositors eventually got back over 85% of their deposits. They had 50% in hand the week after the receivership.
  - HWR_14 4y ago
    How can I buy those claims? While I certainly don't think it's 100%, I also thinks the redemption will be higher than 60%
ignoramous 4y ago
SVB also lent to VCs/PEs on behalf of LPs? Not sure how big that portion of their business was.
deleted 4y ago
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fsckboy 4y ago
actually, not making payroll is one of the conditions that can pierce the corporate veil, shareholders would need to pony up more money. But in the bankruptcy situation before that, payroll would be at the front of the line for the trustee to pay out to first, assuming some assets which of course there are.

The large majority of accounts at SVB were held by businesses. The businesses need to make payroll. The problem is businesses not making payroll for their staff.

luckylion 4y ago

They'll certainly get bridge loans to handle that if they're fiscally sound. And there's no indication that "there's nothing left, and everyone has lost everything above $250k", it'll just take a while, and they might lose a few %.

startupsfail 4y ago

There are these $40b dollars that were transferred from the bank during bank run? Can maybe the the VCs responsible for the bunk run step in and pitch in 5% from that to fund the payroll?

JumpCrisscross 4y ago
SVB claims are trading around 60¢ on the dollar. Nobody should be more than a few days delayed on near-term payroll.
- johnbellone 4y ago
  Are uninsured deposits going to only receive 60¢ on the dollar?
  - dmurray 4y ago
    The smart money (the people buying at 60c) presumably expects them to receive quite a bit more. Those selling at 60c are generally doing so because they are desperate for the cashflow. Likely the number will go up as more cautious/less nimble entities are able to evaluate the trade and decide they can buy the claims at a higher price. I'd bet on 80%+ probability of uninsured depositors getting back 100c on the dollar, 99% they get back at least 60c on the dollar.
  - kasey_junk 4y ago
    During IndyMac, widely considered the worst bank failure in the fdic regime, uninsured depositors eventually got back over 85% of their deposits. They had 50% in hand the week after the receivership.
- HWR_14 4y ago
  How can I buy those claims? While I certainly don't think it's 100%, I also thinks the redemption will be higher than 60%

ignoramous 4y ago

SVB also lent to VCs/PEs on behalf of LPs? Not sure how big that portion of their business was.

deleted 4y ago

[deleted]

fsckboy 4y ago

actually, not making payroll is one of the conditions that can pierce the corporate veil, shareholders would need to pony up more money. But in the bankruptcy situation before that, payroll would be at the front of the line for the trustee to pay out to first, assuming some assets which of course there are.