The Second Circuit delivered an important win to the FDIC in litigation arising from the collapse of Silicon Valley Bank, holding that the agency did not need to file claims in the parent company’s bankruptcy case to preserve defensive setoff rights. The ruling strengthens the FDIC’s hand as receiver and clarifies how bank receivership powers intersect with bankruptcy procedure in one of the most closely watched financial-failure disputes in years.

At the center of the fight is SVB Financial Group’s effort to recover roughly $1.7 billion in deposits.