Form 4: Eagle Point Credit Management Reduces ACRES Preferred Stock Holdings

Eagle Point Credit Management and Eagle Point DIF GP I, 10% owners and directors of ACRES Commercial Realty Corp., reported sales of 7.875% Series D Preferred Stock totaling 1,081 shares in late August and early September 2025.

Summary

• Eagle Point Credit Management LLC and Eagle Point DIF GP I LLC, entities identified as 10% owners and directors of ACRES Commercial Realty Corp. (ACR), reported sales of 7.875% Series D Preferred Stock.
• Transactions occurred on August 28, 2025, involving the sale of 323 shares at $22.35 per share.
• An additional 658 shares were sold on August 29, 2025, at a weighted average price of $22.52 per share, with prices ranging from $22.40 to $22.63.
• A further 100 shares were sold on September 2, 2025, at $22.35 per share.
• Following these transactions, the reporting persons indirectly beneficially own 794,985 shares of 7.875% Series D Preferred Stock.
• Reporting persons also indirectly beneficially own 1,177,060 shares of Common Stock, $0.001 par value, and 393,646 shares of 8.625% Series C Preferred Stock.
• The reported transactions were made pursuant to a Rule 10b5-1(c) plan.
• The reporting persons disclaim beneficial ownership of the securities described in this report pursuant to Rule 16a-1(a)(4).

Sentiment

Score: 5

Explanation: Neutral. While insider selling can be perceived negatively, the transactions were made under a Rule 10b5-1 plan, suggesting pre-planned activity rather than a reaction to new adverse information. The reporting persons also disclaim beneficial ownership. The unusual aspect of future transaction dates in a Form 4 filing introduces a degree of ambiguity but does not inherently alter the neutral sentiment regarding the underlying company's performance.

Negatives

• Sales of preferred stock by a 10% owner and director could be perceived as a slight negative signal, although mitigated by the Rule 10b5-1 plan and disclaimer of beneficial ownership.

Risks

• The reported transaction dates (August 28, 2025, August 29, 2025, and September 2, 2025) are in the future relative to the filing date of September 2, 2025, which is unusual for a Form 4 filing that typically reports completed transactions. This could lead to confusion or misinterpretation regarding the timing of the reported sales.

Future Outlook

No explicit future outlook or guidance is provided in this Form 4 filing, which primarily reports past or planned insider transactions. The use of a Rule 10b5-1 plan indicates pre-arranged future transactions, but specific forward-looking statements about the company's performance are not included.

Management Comments

• Reporting persons disclaim beneficial ownership of the securities described in this report pursuant to Rule 16a-1(a)(4) under the Securities Exchange Act of 1934, and inclusion of these securities in this report shall not be deemed an admission of beneficial ownership for purposes of Section 16 or for any other purpose.

Industry Context

This Form 4 filing reports insider transactions for ACRES Commercial Realty Corp., a real estate investment trust (REIT). Insider sales, even by 10% owners, are a routine disclosure in the financial industry. The use of a Rule 10b5-1 plan is a common practice for insiders to pre-arrange stock sales to avoid accusations of trading on material non-public information, suggesting these are planned liquidity events or portfolio adjustments rather than a reaction to new company-specific news. The REIT sector is sensitive to interest rates and real estate market conditions, but this filing does not provide direct insights into those broader trends.

Corporate Governance

Related Party Transactions

• Sales of 7.875% Series D Preferred Stock by Eagle Point Credit Management LLC and Eagle Point DIF GP I LLC, which are identified as 10% owners and directors of ACRES Commercial Realty Corp., constitute related party transactions.

Stakeholder Impact

• Shareholders might view the sales by a 10% owner as a minor negative, but the pre-arranged nature (Rule 10b5-1 plan) and the disclaimer of beneficial ownership by the reporting entities are likely to temper any significant concerns.
• Regulatory bodies will note the compliance with Form 4 filing requirements and the disclosure of the 10b5-1 plan.

Next Steps

• The reporting person undertakes to provide full information regarding the number of shares sold at each separate price within the reported ranges upon request by the staff of the Securities and Exchange Commission, the Issuer, or any security holder of the Issuer.

Key Dates

Recommendation

The filing reports routine insider sales of preferred stock by a 10% owner under a pre-arranged Rule 10b5-1 plan. The reporting persons also disclaim direct beneficial ownership. While the transaction dates are unusually in the future, this type of disclosure is generally not indicative of a significant change in company fundamentals or outlook, thus a 'hold' recommendation is appropriate as it does not provide new information to alter an existing investment thesis.

Keywords

ACRES Commercial Realty Corp., ACR, Eagle Point Credit Management, Eagle Point DIF GP I, Form 4, Insider Selling, Preferred Stock, Beneficial Ownership, Rule 10b5-1, Real Estate Investment Trust, REIT