The Polsinelli | TrBk Healthcare Services Distress Research Index equaled its high from the previous quarter in Q3 2016 and has now reached record levels in three successive quarters. Compared to the same period one year ago, the index is up 65 points, indicating that the high level of distress in the healthcare services industry continues.
The Chapter 11 Distress Research Index fell by five points in Q3 from Q2 but remained almost five points higher than the same period one year ago. The Chapter 11 index has declined 17 times and increased six times compared to the prior quarter, indicating a significant downward trend in general filing levels since 2010. However, the index has increased five of the last eight quarters, indicating an upward trend in overall distress over the past two years. Despite the decline in the most recent quarter, the index has increased by almost 25 percent since Q2 2015, its low point since tracking began.
The Polsinelli | TrBK Distress Indices are based on Chapter 11 bankruptcy filing data collected and provided by the TrollerBK.com bankruptcy service. Polsinelli is a law firm with 800 attorneys located in 20 offices throughout the United States. The Chapter 11 Distress Research Index serves as the primary index and is based on filings by entities with assets scheduled at greater than $1 million as represented on initial Chapter 11 petitions. Individuals and involuntary filings are excluded from the calculation.
The indices are likely to be contrarian indicators of economic performance, so that a low index value is likely to occur in a strong economy, and a higher index value is likely to occur when financial distress is escalating. They are intended to reflect the level of economic distress in the U.S. economy by tracking the increase or decrease in comparative Chapter 11 filings for prior quarters and years, based on a rolling four-quarter average. Calculated from 2010 through the present, they are benchmarked based on filing numbers in 2010 using a rolling four-quarter average. More details on the latest quarterly report are available at distressindex.com.