A flurry of bankruptcy filings from senior-focused health care facilities has shaped the U.S. economic distress in the fourth quarter of 2021, which is detailed in the newest Polsinelli-TrBK Distress Indices Report
The report, released today by Am Law 100 firm Polsinelli, explains how senior living-focused organizations, independent/assisted living communities and skilled nursing facilities represent a significant portion of the health care bankruptcy filings as health care begins its return to pre-pandemic numbers. These health care facilities are dealing with decreased patient census, increased operating costs, and significant pressure on staffing and labor costs.
“We anticipate that the bankruptcy filing numbers will continue to increase, especially in the health care and real estate industries, as we enter 2022. We haven’t seen the end of COVID-19 yet and the massive federal assistance that has kept facilities afloat will end soon,” said Polsinelli Shareholder Jeremy Johnson, a bankruptcy and restructuring attorney and co-author of the report.
The Polsinelli-TrBK Distress Indices are the backbone of a quarterly research report series that uses Chapter 11 filing data – bankruptcies with more than $1 million in assets – as a proxy for measuring financial distress in the overall U.S. economy and breakdowns of distress specifically in the real estate and health care services sectors. It is the only current measurement that tracks both Main Street and Wall Street statistics.
Other significant updates in the report include:
- The Chapter 11 Distress Research Index was 39.60 for the fourth quarter of 2021. The Chapter 11 Index decreased nine points since the last quarter. Compared with the same period one year ago, the Index has decreased over 47 points and compared with the benchmark period of the fourth quarter of 2010, it is down over 60%. This is the third consecutive quarter where the Chapter 11 Distress Research Index registered a decrease.
- The Real Estate Distress Research Index was 20.17 for the fourth quarter of 2021. The Real Estate Index has decreased more than one point since the last quarter. Compared with the same period one year ago, the Index decreased eight points and compared with the benchmark period of the fourth quarter of 2010, it is down 80%.
- The Health Care Services Distress Research Index was 196.67 for the fourth quarter of 2021. The Health Care Index increased 108 points since the last quarter. Compared with the same period one year ago, the Index has decreased over 220 points and compared with the benchmark period of the fourth quarter of 2010, it is up 96%.
The Polsinelli-TrBK Distress Indices track the increase or decrease in all Chapter 11 filings with more than $1 million in assets since the fourth quarter of 2010. Unlike the public markets, the Polsinelli-TrBK Distress Indices include both public and private companies, creating a broader economic view and one that may show developing trends on Main Street before they appear on Wall Street.
To access the full report, graphs and all past analyses, visit https://www.distressindex.com.
Polsinelli is an Am Law 100 firm with 950 attorneys in 21 offices nationwide. Recognized by legal research firm BTI Consulting as one of the top firms for excellent client service and client relationships, the firm’s attorneys provide value through practical legal counsel infused with business insight, and focus on health care, financial services, real estate, intellectual property, middle-market corporate, labor and employment and business litigation. Polsinelli PC, Polsinelli LLP in California.