Hundreds of public companies have filed current reports on Form 8-K since Silicon Valley Bank (SVB) became insolvent and was taken over by the FDIC. The disclosures made to date have been primarily “voluntary” filings, made to comply with SEC’s Regulation FD, and designed to alert security holders and the market generally about the impact of SVB’s troubles on the filing company. Many of the filings disclose no material impact on the filing company. Others, however, disclose various kinds of issues of varied gravity.
Foley & Lardner LLP has been tracking these disclosures and has developed templates for several common fact patterns. We will continue to monitor public company disclosures as the situation evolves as part of our comprehensive coverage of the shifting business, financial, legal, and regulatory landscape. Likewise, we will continue to develop new disclosure templates for common fact patterns that we perceive in the host of public companies reporting on their connections to SVB.
For example, for companies that have lost access to debt facilities or that may determine that there has been a termination of a material definitive agreement as a result of recent activity, there may be a trigger for a mandatory filing on Form 8-K. Many of these debt facilities will need to be refinanced in coming days and weeks, resulting in more potential required disclosure to the extent there are material new agreements or material amendments to existing agreements.
We also expect the situation to evolve into Management Discussion and Analysis (MD&A) and risk factor disclosures for many in upcoming reports on Forms 10-Q and 10-K. Further, if you work in or with a public company affected by SVB that is a shelf registrant, or that otherwise expects to go to market soon with a new issue of equity or debt securities, then you will want to be especially attentive to recommended disclosures about these issues. You will also want to be mindful on an ongoing basis of whether the company is in possession of material nonpublic information (MNPI) that could impact its ability to conduct transactions in its securities, including stock repurchase activity. Public companies should additionally be evaluating whether any trading blackouts should be imposed for its insiders under insider trading policies relating to any such MNPI.
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