I have 10 million USD deposited with Silicon Valley Bank. Now that they are liquidated, let's say I get to recover FDIC insured 0.25 million plus 5.75 million, total 6 million.
At the same time, I owe Silicon Valley Bank 4 million dollars. What happens? Do the unrecovered deposits and loan cancel each other out? Or do I have to pay them back 4 million?
Your liabilities are not canceled out with your claims automatically. If this is a real story, it's best to talk to a lawyer familiar with bankruptcy proceedings.
You still owe money to whoever owns the bankrupt bank now - that is, to the State of California. This debt stands to be collected.
During the bankruptcy, your claim will be resolved in order of priority. After FDIC payout, the rest of your deposit will be priority unsecured debt. It is prioritized after priority payments and secured debts, but before non-priority unsecured debt.
It is theoretically possible to lose the full deposit and still be liable for the debt.
