Inside a bankruptcy committee’s ongoing investigation into the failure of Silicon Valley Bank

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 consultant 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,

Jessica Mathews
Twitter: @jessicakmathews
Email: [email protected]
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Correction, Nov. 9, 2023: The online version of this newsletter has been corrected to reflect that E&Y was a consultant, not Silicon Valley Bank’s auditor.

Joe Abrams curated the deals section of today’s newsletter.

VENTURE DEALS

- OrsoBio, a Menlo Park, Calif.-based clinical stage biopharmaceutical company researching metabolic disorders, raised $60 million in Series A funding. Longitude Capital and Enavate Sciences led the round and were joined by Samsara BioCapital and NuevaBio. 

- Refurbed, a Vienna, Austria-based online marketplace for refurbished tech products, raised $57 million in Series C funding. Evli Growth Partners and C4 Ventures led the round and were joined by All Iron Venture and Speedinvest

- Niron Magnetics, a Minneapolis, Minn.-based manufacturer of permanent magnets for computers, appliances, automobiles, and other machines, raised $33 million in funding from GM Ventures, Stellantis Ventures, Shakopee Mdewakanton Sioux Community, and others.

- Tabnine, a Tel Aviv, Israel-based company creating an AI-powered assistant for code developers, raised $25 million in Series B funding. Telstra Ventures led the round and was joined by Atlassian Ventures, Elaia, and others.

- Arch, a New York City-based management platform for private market investments, raised $20 million in Series A funding. Menlo Ventures led the round and was joined by Craft Ventures, Quiet Capital, Carta, Citi Ventures, GPS Investment Partners, and Focus Financial Partners. 

- Flip AI, a San Francisco-based platform that uses a large language model to monitor the health of software systems, raised $6.5 million in seed funding. Factory led the round and was joined by Morgan Stanley Next Level Fund and GTM Capital.

- Ghost Autonomy, a Mountain View, Calif.-based developer of autonomous car technology, raised $5 million from the OpenAI Startup Fund. 

- Tidal Cyber, a Baltimore, Md.-based cybersecurity platform designed to protect companies from cyber attacks that are specifically relevant to their industries, raised $5 million in seed funding. Squadra Ventures led the round and was joined by existing investors. 

- EarnBetter, a Lafayette, Calif.-based AI-powered job search assistant that can rewrite resumes, draft cover letters, and find jobs, raised $4.5 million in seed funding from Andreessen Horowitz, Abstract Ventures, and others.

- Davinci Micro Fulfillment, a New York City-based provider of e-commerce merchandising and one to two-day parcel delivery services, raised $3 million in seed funding from Las Olas Venture Capital, Venture 53 Fund and Accelerator, and Silicon Road Ventures.

- Rainbow Weather, a Lemesos, Cyprus-based app designed to provide precise weather forecasting through the use of AI, raised $1.5 million from Kolos Ventures, Verras Capital, and Melnichek Investments, and others. 

PRIVATE EQUITY

- STG took Avid Technology, a Burlington, Mass.-based provider of video editing software and other media tools, private for $1.4 billion. 

- Amplix, a portfolio company of Gemspring Capital, acquired TNS Communications, a Chichester, N.H.-based IT and software services provider. Financial terms were not disclosed.

- CORE Industrial Partners acquired General Converting, Bolingbrook, Ill.-based provider of folding cartons for brands in the food, confection, and consumer markets. Financial terms were not disclosed.

- Goldman Sachs Asset Management agreed to acquire DOXA Insurance Holdings, a Fort Wayne, Ind.-based underwriting company. Financial terms were not disclosed. 

- Nordic Capital agreed to acquire IntegriChain, a Philadelphia, Penn.-based platform designed to connect pharmaceutical products with customers. Financial terms were not disclosed.  

- ParkerGale Capital acquired Gap Intelligence, a San Diego, Calif.-based provider of market intelligence to manufacturers and resellers and Deep.ad, a Lincolnwood, Ill.-based provider of brand attribution and market intelligence software for brands, agencies, and market research organizations. Financial terms were not disclosed. 

- United Land Services, backed by Centre Partners and LP First Capital, acquired Benchmark Landscaping, a Jacksonville, Fla.-based provider of landscaping services and Georgia Scapes, a Liburn, Ga.-based provider of landscape services. Financial terms were not disclosed.

EXITS

- Getir, backed by Baseline Partners, acquired FreshDirect, a New York City-based online grocery company, from Ahold Delhaize USA. Financial terms were not disclosed. 

- Macquarie Capital Principal Finance agreed to acquire Camin Cargo Control Holdings, a Pasadena, Texas-based provider of independent testing, inspection, and certification services to the energy industry, from Metalmark Capital Partners. Financial terms were not disclosed. 

- NTT DATA Business Solutions acquired Sapphire, a London-based digital operations platform for companies, from Horizon Capital. Financial terms were not disclosed. 

- Savillex, a portfolio company of Thompson Street Capital Partners, acquired ONFAB, a Middlewich, England-based designer, manufacturer, and installer of flexible containment equipment used in the pharmaceutical manufacturing process, from Envair Technology. Financial terms were not disclosed.

FUNDS + FUNDS OF FUNDS

- Craft Ventures, a San Francisco-based venture capital firm, raised $712 million for its fourth fund focused on early-stage B2B software companies and $608 million for its second growth fund focused on B2B software companies. 

- 01 Advisors, a San Francisco-based venture capital firm, raised $395 million for its third fund focused on Series B-stage companies.

PEOPLE

- Multiplier Capital, a Washington, D.C.-based growth debt platform, hired Ashish Vaidya as managing director. Formerly, he was with Sanctum Capital.

- 01 Advisors, a San Francisco-based venture capital firm, promoted David Fischer to general partner. Formerly, he was with Facebook.

Correction, Nov. 9, 2023: A previous version of this newsletter misstated that 01 Ventures had raised a venture fund and promoted one of its partners. It was 01 Advisors.