Journal of
Corporate
Renewal
Sept
2016
FEATURE
Polsinelli|TrBK Distress Indices: 2nd Quarter 2016
52.68 166.33 27. 14
Max: 100.00 in 10-Q4
Max: 166.33 in 16-Q2
Min: 98.33 in 12-Q2, 13-Q4, and 15-Q3
Max: 100.00 in 10-Q4
Indices based on trailing four quarter average, with trailing four quarters ending 10-Q4 equaling 100 as index baseline;
minimum and maximum values based on 10-Q4 index value and forward.
Chapter 11 Distress Index Healthcare Services Distress Index Real Estate Distress Index
July 2016 POLSINELLI TrBK
DISTRESS INDICES
0
20
40
60
80
100
120
140
160
180
10
-Q
1
10
-Q
3
11
-Q
1
11
-Q
3
12
-Q
1
12
-Q
3
13
-Q
1
13
-Q
3
14
-Q
1
14
-Q
3
15
-Q
1
15
-Q
3
16
-Q
1
I
nd
e
x
Chapter 11 Distress Index
0
20
40
60
80
100
120
140
160
180
10
-Q1
10
-Q3
11
-Q1
11
-Q3
12
-Q1
12
-Q3
13
-Q1
13
-Q3
14
-Q1
14
-Q3
15
-Q1
15
-Q3
16
-Q1
I
nd
e
x
Real Estate Distress Index
0
20
40
60
80
100
120
140
160
180
10
-Q1
10
-Q3
11
-Q1
11
-Q3
12
-Q1
12
-Q3
13
-Q1
13
-Q3
14
-Q1
14
-Q3
15
-Q1
15
-Q3
16
-Q1
Inde
x
Healthcare Services Distress Index
Indices Point to Increasing
Distress in U.S. Economy
The Polsinelli|TrBK Chapter 11 Distress
Research Index increased by nearly 8
points, to 52.68, in Q2 2016 versus the
previous quarter and has now increased
for five of the last six quarters. Compared
with the same period one year ago,
the index has risen nearly 15 points, or
approximately 39 percent. However,
compared to its benchmark period of
the fourth quarter of 2010, the index
remains down by more than 47 percent.
Q2 2016 marks the second time, and the
second consecutive quarter, that all three
Polsinelli|TrBK indices—the Chapter 11
Distress Index, the Real Estate Distress
Index, and the Healthcare Services
Distress Index—have increased in the
same period. With several quarters of
increase for the Chapter 11 Index, a
significant increase in the Healthcare
Service Index to its highest point since
the Great Recession, and the Real
Estate Index having stabilized with
a slight increase, the second quarter
results suggest that distress continues
to increase across the U.S. economy.
The Healthcare Services Distress
Research Index was 163.33 for the
second quarter of 2016, an increase of
almost 12 points, or about 8 percent,
since the previous quarter. This is the
highest the index has registered during
its measurement period and exceeds
the prior record high from Q1 2016.
Compared with the same period one year
ago, the index has increased by 50 points,
or approximately 44 percent, and is 66
percent above its benchmark in Q4 2010.
The Real Estate Distress Research Index
was 27. 14 for Q2 2016, an increase
of more than 1 point since the first
quarter of the year. This is only the
third time since the index’s inception
that it has moved upward and the first
time it has increased in consecutive
quarters. Compared with the same
period one year ago, the index has
increased more than 2 points, or
about 8 percent. Although the index
appears to be climbing slightly, it
remains down by more than 72 percent
against its benchmark in Q4 2010.
On a trailing four-quarter average, the
percentage of real estate filings among
all index-measured Chapter 11
filings has fallen from 19.61 percent
in 2010 to 10. 29 percent in Q2 2016,
having stayed relatively flat since the
last quarter. Healthcare services filings
have increased from 1. 11 percent
among all index-measured Chapter
11 filings in 2010 to 3. 5 percent in
Q2 2016, but remain relatively stable
compared with the prior quarter.
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.
Calculated from 2010 through the
present, they are benchmarked based
on filing numbers in 2010 using a
rolling four-quarter average. The indices
are released quarterly, about 30-45
days after the end of each period. J
