Silicon Valley Bank was repaid millions by distressed custom furniture retailer Interior Define before both collapsed

When Interior Define began a liquidation process in late December, the Chicago-based custom furniture retailer left thousands of customers with unfulfilled orders and little hope of recovering their money.

But the since-failed Silicon Valley Bank was repaid millions by Interior Define as both stood on the precipice of collapse.

In a confluence of business implosions, documents show Silicon Valley Bank was a secured lender to Interior Define before the retailer made an assignment for the benefit of creditors, a bankruptcy alternative under Illinois law that bypasses the courts to transfer an insolvent company’s assets free of unsecured debt.

Interior Define, which struggled much of last year with order backlogs, dwindling cash reserves and mounting debt, owed four secured lenders about $25 million in late 2022, but the balance was reduced to $14 million as of the Dec. 31 notice of assignment, according