The collapse of Silicon Valley Bank (SVB) has spurred legal teams into action. SVB was reportedly advised by US law firms Cooley, Holland & Knight, and Sullivan & Cromwell. These firms are bringing together banking, technology, insolvency, and regulatory teams to answer client calls, focusing on options for alternative funding sources, cash flow, and other financial restructuring and insolvency issues.
Meanwhile, SVB’s clients have been looking for advice from US and UK lawyers on alternative sources for immediate-term financing, both privately or via sponsors, or via bridging loans to shore up immediate liquidity needs. A briefing from global law firm Taylor Wessing said initial advice would focus on the availability of credit lines, day-to-day decisions involving cash management, and potentially significant cash deposits held with SVB.
On top of it, as well as advising on impacts on their portfolio companies, institutional investors were also concerned about their cash deposits and managing risk. Taylor Wessing said: “We are alive to the multitude of contractual terms that many of our clients are currently navigating and seeking to balance with the wider commercial risks they may face as this situation develops.”
This is an ongoing situation that will continue to receive attention from legal teams and regulators alike.