In this article, a novel fundamental zero-sequence voltage (FZSV) expression is proposed for fault-tolerant operation of the cascaded H-bridge (CHB) static synchronous compensator (STATCOM) which helps in providing balanced line voltages with single and multiple number of faulty cells. The challenge of balancing the cell capacitor voltages during post-fault conditions due to addition of FZSV is solved by introducing a reserved cell into the circuit of the CHB STATCOM. Additionally, the reserved cell helps to regain the pre-fault rated line voltages of the faulty CHB STATCOM. Furthermore, the post-fault output voltages from the CHB phases are maximized by adding harmonic voltages using a modified max-min algorithm. However, with unequal number of operating cells during post-fault conditions, cancellation of harmonic voltages in the line voltages does not happen naturally. Hence, in the present article, it is proposed to produce compensatory harmonic voltages from the reserved cell. It helps in eliminating the harmonic voltages from the line voltages while maximizing the post-fault output voltages from the CHB STATCOM. The viability of the proposed idea of post-fault operation of the faulty CHB STATCOM with single and multiple number of faulty cells is verified with MATLAB-Simulink software and experimental prototype developed in the laboratory.