Form 4: ACRES Commercial Realty Sees Significant Preferred Stock Sales by Major Shareholder Eagle Point Credit Management

Eagle Point Credit Management LLC and its affiliate, a 10% owner and potential director of ACRES Commercial Realty Corp., reported the sale of over 12,000 shares of 7.875% Series D Preferred Stock in mid-June 2025, pursuant to a pre-arranged trading plan.

Summary

• Eagle Point Credit Management LLC and Eagle Point DIF GP I LLC, identified as 10% owners and potentially directors of ACRES Commercial Realty Corp. (ACR), reported sales of preferred stock.
• A total of 12,024 shares of 7.875% Series D Preferred Stock were sold across three transactions in June 2025.
• On June 13, 2025, 400 shares were sold at $22.25 per share.
• On June 16, 2025, 553 shares were sold at $22.30 per share.
• On June 17, 2025, 11,071 shares were sold at a weighted average price of $22.39 per share, with individual sales ranging from $22.35 to $22.40.
• Following these transactions, Eagle Point Credit Management LLC and its affiliates indirectly beneficially own 847,501 shares of 7.875% Series D Preferred Stock.
• The reporting persons also indirectly beneficially own 1,177,060 shares of Common Stock and 393,646 shares of 8.625% Series C Preferred Stock.
• The transactions were made pursuant to a Rule 10b5-1(c) plan, indicating a pre-arranged sale schedule.
• The reporting persons disclaim beneficial ownership of the securities, stating they are held by private investment funds and accounts managed by Eagle Point Credit Management LLC, with Eagle Point DIF GP I LLC serving as general partner to some accounts.

Sentiment

Score: 5

Explanation: The sentiment is neutral. While insider sales can sometimes be negative, these sales are by an investment manager disclaiming beneficial ownership and are conducted under a pre-arranged 10b5-1 plan, which mitigates the negative implications typically associated with reactive insider selling.

Negatives

• The sale of preferred stock by a significant owner could be perceived negatively by some investors, potentially indicating a reduction in conviction or a need for liquidity, although these sales were pre-planned.

Risks

• The reporting persons disclaim beneficial ownership of the securities, which are held by private investment funds and accounts they manage, potentially complicating the interpretation of their 'beneficial ownership' for Section 16 purposes.
• Future sales under the Rule 10b5-1 plan could continue to add selling pressure to the stock.

Future Outlook

The document indicates that the transactions were made pursuant to a Rule 10b5-1(c) plan, suggesting these are pre-scheduled sales. This implies that similar planned transactions may occur in the future, though no specific future outlook or guidance for the company's performance is provided.

Management Comments

• "The securities are directly held by certain private investment funds and/or certain accounts (the 'Applicable Accounts') managed by Eagle Point Credit Management LLC ('EPCM'). Eagle Point DIF GP I LLC ('DIF GP') serves as general partner to certain Applicable Accounts."
• "EPCM and DIF GP could be deemed to have an 'indirect pecuniary interest' (within the meaning of Rule 16a-1(a)(2)(ii) under the Securities Exchange Act of 1934) in securities reported herein."
• "Each of the Reporting Persons hereby disclaims beneficial ownership of the securities described in this report pursuant to Rule 16a-1(a)(4) under the Securities Exchange Act of 1934 and the inclusion of these securities in this report shall not be deemed an admission of beneficial ownership of any of the reported securities for purposes of Section 16 or for any other purpose."
• "The price reported reflects the weighted average price per share. These securities were sold in multiple transactions at prices ranging from $22.35 to $22.40 per share, inclusive. Upon request by the staff of the Securities and Exchange Commission, the Issuer or any security holder of the Issuer, the reporting person undertakes to provide full information regarding the number of shares sold at each separate price within the ranges set forth in this footnote."

Industry Context

This Form 4 filing is a routine disclosure of insider trading activity. For investment management firms like Eagle Point Credit Management, managing and adjusting portfolio holdings, including those in publicly traded companies where they hold significant stakes, is a standard part of their business operations. The use of a Rule 10b5-1 plan indicates a pre-scheduled, rather than reactive, sale.

Related Party Transactions

• The securities are held by private investment funds and accounts managed by Eagle Point Credit Management LLC, with Eagle Point DIF GP I LLC serving as general partner to some of these accounts. This structure represents a common related-party arrangement for investment managers reporting holdings.

Stakeholder Impact

• Shareholders: The sale of preferred stock by a significant owner could lead to increased supply of the stock in the market, potentially influencing its price. However, the pre-planned nature of the sales (10b5-1 plan) may reduce concerns about adverse implications.

Key Dates

Keywords

SEC Form 4, Insider Trading, Beneficial Ownership, ACRES Commercial Realty Corp., ACR, Eagle Point Credit Management LLC, Preferred Stock, Stock Sales, Rule 10b5-1, Investment Funds