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In SVB Financial Trust v. Federal Deposit Insurance Corporation (In re SVB Financial Group), No. 25-567, , (2nd Cir. 2026), the U.S. Circuit Court of Appeals for the Second Circuit held that a creditor whose setoff right under state law is purely defensive does not hold a "claim" within the meaning of the Bankruptcy Code and, therefore, need not file a proof of claim to preserve its right to use setoff to reduce or defeat the debtor's claims against it.
In this Westlaw Today article, Loeb Restructuring & Bankruptcy partners Bethany Simmons and Noah Weingarten discuss this recent Second Circuit ruling, noting that the decision addresses a recurring question under the Bankruptcy Code and offers important guidance on the preservation of setoff rights, the impact of bar date orders and Chapter 11 plan provisions, and the role of applicable state law in determining whether a setoff right constitutes a claim.
To read the full article, please visit Westlaw Today’s website.
In this Westlaw Today article, Loeb Restructuring & Bankruptcy partners Bethany Simmons and Noah Weingarten discuss this recent Second Circuit ruling, noting that the decision addresses a recurring question under the Bankruptcy Code and offers important guidance on the preservation of setoff rights, the impact of bar date orders and Chapter 11 plan provisions, and the role of applicable state law in determining whether a setoff right constitutes a claim.
To read the full article, please visit Westlaw Today’s website.
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