The collapse will have far reaching ramifications for many businesses and financial institutions across the UK

On Friday 10 March 2023 it was announced that the Bank of England intends to place Silicon Valley Bank UK Limited (SBV UK) into a Bank Insolvency Procedure following the collapse of its parent company, Silicon Valley Bank, in the US.

This year is expected to be challenging for small businesses due to the possible recession in key markets, disruptions of global supply chains caused by issues such as the Ukrainian war, and the continuing fallout from last year’s crypto winter.

Silicon Valley Bank, the 16th largest bank in the US, was shut down on Friday by US regulators. Founded in 1983, Silicon Valley Bank has played an integral role in the technology sector, lending capital to tech start-ups with high growth potential.

How will the Silicon Valley Bank collapse impact tech firms

The impact of the Silicon Valley Bank collapse on tech start-ups is expected to be significant as many will struggle to survive without access to capital to pay business expenses.

1. INTRODUCTION

Supply chains are facing a fresh barrage of challenges. There are an almost infinite variety of issues that can arise within the supply chain. Minor irritants that historically may have just made business a bit more difficult to transact can, in the current environment, cumulatively exert significant pressure. Additionally, an over reliance on a third party or failure to spot the weakest links in this chain could have a catastrophic impact on your business

In our latest insight, we consider how to identify pinch points in your supply chain and de-risk them.

Last year saw the construction industry face significant challenges, insolvency levels were up with over 5,000 company failures and nearly 23,000 companies in distress by the last quarter.

Construction businesses in the North-East had the second highest sector insolvency rates, with an estimated 540 companies suffering from distress in the last quarter of 2022 –  the highest of any sector.

This distress has now come to fruition with the recent insolvencies of two of the North East’s largest main contractors, Metnor Construction and Tolent Construction.

Commercial activities are subject to constant change and in occasions those that engage in them may face financial difficulties, which may originate within a specific industry or from global external factors such as the Covid-19 pandemic, the supply chain crisis, or other social and political events such as government elections.

Las actividades comerciales son susceptibles a cambios constantes y en ocasiones, aquellas personas que participan en el comercio enfrentan dificultades financieras. Dichas dificultades pueden ser propias del giro comercial del empresario; o pueden ser originadas por factores externos que afecten a un sector comercial o industrial específico de manera negativa, tales como la pandemia originada por el Covid-19, la crisis en la cadena de suministros, así como eventos sociales o políticos.

After a pause in 2022, there has been much talk of the continuation, or resumption, of a wave of retail bankruptcy cases as we begin 2023. 2022 was highlighted by Revlon’s filing (discussed here: Revlon May Signal Another Wave of Retail Bankruptcies | Retail & Consumer Products Law Observer (retailconsumerproductslaw.com)).

1. Introduction

The market for distressed transactions is expected to grow in 2023 but will also become more difficult. This makes it all the more important to deal with the specific legal aspects of acquiring a company in times of crisis or insolvency at an early stage.

2. A look back at 2022 and ahead to 2023