By 
SVB Financial Group, the one-time parent company of the failed Silicon Valley Bank, is filing for bankruptcy protection.
The company’s Chapter 11 bankruptcy petition Friday is another development in a banking crisis that’s shaken stock markets and applied pointed questions to banks’ financial health.
After bankruptcy cases dropped off during the pandemic, are they making a comeback?
In January, newly-filed consumer and commercial filings increased by 19% over the same period last year to 31,087. In February, they rose 18% to 31,889.
The data was compiled by Epiq Bankruptcy, a bankruptcy analytics division of Epiq, a legal technology services company, and the American Bankruptcy Institute, a professional organization for attorneys, accountants, judges, professors and others in the bankruptcy field.
“The number of people seeking bankruptcy protection through Chapter 13 repayment plans last year jumped more than 30% year over year, according to the American Bankruptcy Institute. ”
Both Togut and Foohey say more bankruptcies are a matter of when and not if.
For consumers under the wear and tear of inflation, Foohey said the labor market for now can only help the most financially distressed households hold on for so long. And people can only keep putting so much on credit cards, she added.
“A strong job market is helpful for people. What’s more helpful is a job market that pays people salaries that keep up with inflation and keeps up with rising debt expenses,” she said.
On Friday afternoon, stocks slumped under pressure.
The Dow Jones Industrial Average
DJIA,
-1.19%
finished Friday down 384 points, or 1.2%, to close at 31,861. The S&P 500
SPX,
-1.10%
dropped 43 points, or 1.1%, to finish at 3,916. The Nasdaq Composite
COMP,
-0.74%
lost 86 points, or 0.7%, and closed at 11,630.
“The Chapter 11 process will allow SVB Financial Group to preserve value as it evaluates strategic alternatives for its prized businesses and assets, especially SVB Capital and SVB Securities,” William Kosturos, SVB Financial Group’s chief restructuring officer, said in a statement.
SVB Financial Group is no longer affiliated with Silicon Valley Bank. After California regulators closed Silicon Valley Bank and the Federal Deposit Insurance Corporation took it into receivership, the successor bank, Silicon Valley Bridge Bank, is under FDIC jurisdiction.
New York regulators on Sunday also closed Signature Bank and the FDIC took it into receivership.
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