2

Does this happen?

For example, an oil company files, thinking it just doesn't have enough assets to cover its liabilities, then shortly afterwards, it makes a big new discovery, or the price of oil goes way up, or both.

3

Companies have several bankruptcy filing choices in the US. Which one would be available would depend on the financials of the company.

Chapter 11 bankruptcy protection means that a company near bankruptcy believes that it can recover, given the opportunity to reorganize.

For companies where there is no hope of recovery, Chapter 7 and Chapter 13 protection involve the cessation of business operations and that results in the total liquidation of assets.

So it would stand to reason that if a company was under Chapter 11 reorganization and good news such as you suggested occurred and changed the financial outlook, they would emerge from protection much sooner. Whether this has ever happened, I have no clue.

For the other two scenarios, a company in liquidation would be toast and the creditors or those purchasing the assets might benefit (lose less) or possibly profit (if substantial oils reserves were discovered).

  • 2
    Quite a few companies have emerged from bankruptcy – Dheer Jun 3 '18 at 1:20
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    As per the OP, it's not a question of whether companies have emerged from bankruptcy but rather one of whether some windfall news occurred during bankruptcy proceedings. At any given time in the U.S. there are a number of companies trading that are in bankruptcy proceedings. They will have a Q after their stock symbol. Some make it. Some don't. – Bob Baerker Jun 3 '18 at 11:29
0

There's an example of something kind of like this with the Mt. Gox Bitcoin exchange. In 2014, it had some bitcoins stolen and declared bankruptcy. At that time, its creditors claims were defined in Yen (as Mt. Gox is a Japanese company). But since that time, Mt. Gox both found some more of the bitcoins that it had lost, and the value of the bitcoins have gone up significantly. But the bankruptcy court is still looking at the creditors value in Yen (even though many of the creditors really would like to just have their bitcoin back since it's worth much more now), so after paying off that 2014-Yen-value there may be a surplus which could end up going to the owners of Mt. Gox.

For a great article describing what happened, see "Bitcoin Bankruptcy Wasn't Really a Bust" by my favorite finance writer Matt Levine.

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