Feb 28 (Reuters) - Silicon Valley Bank's former parent

may pursue a lawsuit to recover $1.93 billion of deposits that

the Federal Deposit Insurance Corp seized following the bank's

March 2023 collapse, a federal judge ruled.

In a decision on Thursday, U.S. District Judge Beth Labson

Freeman in San Jose, California said the former parent, now

known as SVB Financial Trust, adequately alleged that the FDIC

in its corporate capacity maintained control over the deposits,

though the allegations were "vanishingly thin."

The agency had argued that the deposits were controlled by

the FDIC in its capacity as Silicon Valley Bank's receiver, a

different legal entity that the former parent is also suing.

Freeman also said the former parent can try to show it

properly relied on FDIC assurances that deposits would remain

safe, inducing it to leave them alone. She dismissed a due

process claim.

Lawyers for the FDIC and the former parent did not

immediately respond to requests for comment on Friday.

Silicon Valley Bank collapsed after rising interest rates

caused big losses in its portfolio of long-term government bonds

and mortgage-backed securities.

Its problems sparked a bank run, in part because an

unusually large percentage of deposits was uninsured, and

disrupted many technology startups whose deposits it held.

The bank had about $209 billion of assets before it failed,

in one of the largest collapses in U.S. banking history.

Much of its business was transferred to First Citizens

BancShares, a North Carolina lender.

Freeman ruled six weeks after the FDIC sued 17 former

Silicon Valley Bank executives and directors, including onetime

Chief Executive Gregory Becker, to recover billions of dollars

for alleged gross negligence and breaches of fiduciary duty.

"SVB represents a case of egregious mismanagement of

interest-rate and liquidity risks," the FDIC said last month.

The case is SVB Financial Trust v FDIC, U.S. District Court,

Northern District of California, No. 23-06543.