Highlights
Counterparties should continue to follow their current contractual obligations
Silicon Valley Bank’s parent company bankruptcy filing will not impact contractual rights
Counterparties should be vigilant and consider alternate financing arrangements
USA, Banking, Corporate Finance/M&A, Insolvency & Restructuring, Barnes & Thornburg LLP, Venture capital, Federal Deposit Insurance Corporation (USA), Silicon Valley Bank
In a recent decision by the influential Third Circuit Court of Appeals, In re KB Toys Inc., 2013 U.S. App. LEXIS 23083 at *17 (3d Cir. Nov. 15, 2013), the Court decided that “the cloud on the claim” stemming from a preferential payment made to the original claimant continues with the claim, which then could be disallowed.