Companies in the digital currency, industrial and healthcare sectors that are restructuring in bankruptcy court have hundreds of millions of dollars in deposits with Silicon Valley Bank, according to court filings. With their bank accounts blocked when regulators seized the bank on 10 March, they and other SVB clients were scrambling over the weekend to line up alternative sources of funding.

The Santa Clara, California-based bank had been an attractive destination for many bankrupt borrowers because it paid a higher interest rate than other big banks.

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Businesses averted disaster on Sunday when the Federal Reserve stepped in to backstop all deposits of SVB and Signature Bank, another bank that was shut down by regulators on Sunday, in an attempt to ease fears and stem a potential spread to the broader financial system.

If it weren’t for the regulators’ extraordinary intervention, BlockFi and other bankrupt borrowers would have had their cash locked up in the bank or even lost the uninsured funds.

Crypto lender BlockFi said early on 13 March it expects to have immediate access to $37m, which it said is enough to continue operating in the normal course of business and pay employees, vendors and other expenses.

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BlockFi had about $278m at Silicon Valley Bank, the majority of which is in money-market funds, a company lawyer said on 13 March. The US Trustee, a unit at the Justice Department overseeing the nation’s bankruptcy courts, said it had warned the company about the risks and had urged it to show that it has taken steps to safeguard the funds.

The government watchdog said it believed BlockFi’s funds weren’t insured by the Federal Deposit Insurance Corporation. BlockFi has said the funds were invested in highly rated money-market funds, a reasoning the company lawyer repeated on on 13 March.

Judge Michael Kaplan, who is overseeing BlockFi’s chapter 11 case, said company stakeholders likely breathed “a significant sigh of relief” on 13 March after the cryptocurrency lender eased concern over its exposure to the failed bank.

Bankrupt companies are in a particularly dire financial situation and have a smaller margin for error in their cash management systems than other bank clients because they already lack access to ordinary capital sources.

SVB’s collapse happened fast. On 8 March, the bank said it was raising a new round of funding. The quick development of events spotlights an often-overlooked aspect of the chapter 11 system.

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The fears also swiftly spread to Signature Bank, causing regulators to take control.

Imerys Talc America over the weekend requested an emergency hearing in bankruptcy court over concerns about its cash held at Signature Bank. By the morning of 13 March, the cash situation was less urgent at Imerys, which filed for bankruptcy in 2019 over personal-injury claims alleging its talc caused cancer.

“All depositors of Signature Bank will be made whole,” Imerys lawyer Kim Posin told Judge Laurie Selber Silverstein in the US Bankruptcy Court. “I can now confirm that all of the wires from Signature Bank have been processed” and Imerys funds have been transferred to new accounts, Posin said.

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Bankrupt crypto lender Celsius Network said in court papers on 13 March that its funds at Signature Bank appear to be safe and that it expects “minimal disruptions to operations” as it opens new accounts.

Other bankrupt borrowers with accounts at Silicon Valley Bank include pharmaceutical company Clarus Therapeutics, wireless technology developer Starry Group Holdings, and light detection sensors maker Quanergy Systems, each of which said it held roughly $9m in deposits with the bank, according to court filings.

Sorrento Therapeutics Inc., a biopharmaceutical company that filed for bankruptcy last month, had roughly $2.4m in two Silicon Valley Bank accounts. Lucira Health, a bankrupt maker of at-home Covid-19 testing kits, also said last month it has a cash management system mostly with Silicon Valley Bank.

A representative for Starry Group declined to comment. A Sorrento representative had no immediate comment. Representatives at BlockFi, Lucira, Clarus and Quanergy couldn’t be reached for comment.

—Becky Yerak contributed to this article.

Write to Jodi Xu Klein at jodi.klein@wsj.com and Jonathan Randles at Jonathan.Randles@wsj.com

This article was published by The Wall Street Journal, part of Dow Jones