The Polsinelli|TrBK Distress Indices are research indices based on Chapter 11 bankruptcy filing data. 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 dollars as represented on initial Chapter 11 petitions. Individuals and involuntary filings are excluded from the calculation.
The Real Estate Distress Research Index and the Healthcare Services Distress Research Index are subsets of the Chapter 11 Distress Research Index, with each requiring the presence of one additional, and different, criterion. The Real Estate Distress Research Index requires that a filing be classified as a “single asset real estate” case as indicated on the Chapter 11 petition. These filings typically involve companies that are solely in the business of owning and leasing a single property such as an office building, healthcare facility, retail outlet, or multifamily apartment building. The Healthcare Services Distress Research Index requires that the debtor be classified as a “healthcare business” as indicated on the Chapter 11 petition in order to be counted; based on this definition, non-service healthcare businesses are generally excluded from the Healthcare Services Distress Index.
The Polsinelli|TrBK Distress Indices also include in their calculation business filings under Chapter 9 (municipalities) and Chapter 15 (international) that meet the $1 million threshold criteria, but these are generally a very small number of filings by comparison to Chapter 11.
The indices are intended 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. Thus, the indices are one indicator suggesting potential health or trouble in the economy. The indices track the increase or decrease in comparative Chapter 11 filings for prior quarters and years. The indices provide economic information that may not be reflected by the broader stock market averages, because the indices include both public and private company information.
The indices are calculated from 2010 through the present, and are benchmarked based on filing numbers in 2010. The indices are based on independent data collected and provided exclusively by the TrollerBK.com bankruptcy service, and not U.S. government statistical information (although that information is likely to be consistent within a margin of error).
While information for each individual quarter is available from 2010 forward, the indices are calculated on a rolling four quarter basis in order to control for volatility, and to provide a more relevant picture of existing and developing trend lines.
The historical filing information from which the Polsinelli|TrBK Distress Indices are calculated is available for purchase to the public from the TrollerBK.com bankruptcy service. In addition, weekly reports of newly filed cases anticipated to meet the criteria for the indices are also available for purchase from the TrollerBK.com bankruptcy service on a subscription basis.