Backtest — do IP-pledge red flags precede distress?
Our core signal is a patent security interest: a company pledging its patents as loan collateral. Does that signal precede corporate distress? We cross flagged entities with US corporate bankruptcy filings (Chapter 7/11, from the free CourtListener / RECAP archive), match on a canonical entity key, and measure the lead time from signal to filing.
Methodology
Ground truth: recent US corporate Chapter 7/11 filings (CourtListener/RECAP).
Lead time: bankruptcy filing date minus the first security-interest signal date, counted only when the signal precedes the filing.
A validated case
American Foodservice Corporation recorded a patent security interest on 2008-06-18, then filed Chapter 11 on 2012-04-02 — the IP-pledge red flag preceded the bankruptcy by ~45 months.
Framing
This is an aggregate research artifact, not a per-entity prediction. A recorded security interest is a normal financing event and most pledgors never file. The value is the point-in-time dataset — every signal dated, survivorship-bias-free — which makes such backtests reproducible. Not investment or legal advice.