Form 4: Fund 1 Investments, LLC Reports Changes in Beneficial Ownership of Vera Bradley, Inc.

Fund 1 Investments, LLC and related entities report adjustments in their beneficial ownership of Vera Bradley, Inc., including holdings through cash-settled total return swaps, while indicating they are no longer subject to Section 16 reporting requirements.

Summary

• Fund 1 Investments, LLC, along with PLP Funds Master Fund LP, Pleasant Lake Partners LLC, and Jonathan Lennon (collectively, the 'Reporting Persons'), filed a Form 4 indicating changes in their beneficial ownership of Vera Bradley, Inc. securities.
• The Reporting Persons hold 2,783,155 shares of Vera Bradley common stock indirectly through PLP Funds Master Fund LP, for which Pleasant Lake Partners LLC serves as the investment advisor and Fund 1 Investments, LLC as the managing member.
• Additionally, the Reporting Persons have entered into cash-settled total return swaps with an unaffiliated third-party financial institution, providing economic exposure to 2,762,892 notional shares of Vera Bradley common stock.
• These Swap Agreements do not grant the Reporting Persons voting or disposition rights over the underlying shares.
• The report indicates that the Reporting Persons are no longer subject to Section 16 reporting requirements.
• On January 2, 2025, Pleasant Lake Onshore Feeder Fund, LP contributed all of its securities in the Issuer to the Master Fund in a transaction exempt from reporting under Rule 16a-13.

Sentiment

Score: 5

Explanation: The document is a standard regulatory filing, so the sentiment is neutral. It simply reports changes in beneficial ownership.

Positives

• The Reporting Persons are no longer subject to Section 16 reporting requirements, which could reduce administrative burden.

Future Outlook

The expiration date of the Swap Agreements will be automatically extended for successive 12 month periods unless one party provides written notice to the other party, at least 30 calendar days prior to the first extension and at least 15 calendar days prior to any subsequent extension, not to so extend the expiration date.

Industry Context

Form 4 filings are standard disclosures required by the SEC to provide transparency regarding the ownership positions and transactions of company insiders, including significant shareholders. The use of cash-settled total return swaps is a common strategy employed by investment funds to gain economic exposure to a stock without directly owning the shares.

Comparison to Industry Standards

• Hedge funds and investment firms frequently use total return swaps to manage their exposure to various assets, including equities.
• The level of detail provided in this Form 4 is consistent with SEC requirements for disclosing beneficial ownership and derivative positions.
• Other comparable companies that may have similar filings include those with significant institutional ownership and active trading in derivative instruments.

Stakeholder Impact

• The filing provides transparency to shareholders regarding the ownership structure of Vera Bradley, Inc.
• The changes in beneficial ownership may influence investor perception of the company.

Key Dates

Keywords

Vera Bradley, Beneficial Ownership, Fund 1 Investments, PLP Funds Master Fund LP, Pleasant Lake Partners LLC, Cash-Settled Total Return Swaps, Form 4, Section 16