13D Filing: Grizzlyrock Institutional Value Partners, LP and Potbelly Corp (PBPB)

CUSIP NO. 73754Y100

Page 1 of 13 Pages

Phillip M. Goldberg Foley & Lardner LLP 321 North Clark Street Suite 2800 Chicago, IL  60654-5313 (312) 832-4549

Peter D. Fetzer Foley & Larder LLP 777 East Wisconsin Avenue Suite 3800 Milwaukee, WI  53202-5306 (414) 297-5596

GrizzlyRock Institutional Value Partners, LP (“GrizzlyRock Fund“) may direct the vote and disposition of the 301,133 shares of Common Stock it holds directly.  GrizzlyRock Capital, LLC (“GrizzlyRock Capital“) and GrizzlyRock GP, LLC (“GrizzlyRock GP“) serve as the investment adviser to and the general partner of the GrizzlyRock Fund, respectively, and may direct the vote and disposition of the 301,133 shares of Common Stock held by the GrizzlyRock Fund.  Kyle Mowery is the Managing Member of GrizzlyRock Capital and GrizzlyRock GP and may direct GrizzlyRock Capital to direct the vote and disposition of the 301,133 shares of Common Stock held by the GrizzlyRock Fund.  Mr. Mowery specifically disclaims beneficial ownership of such shares.  The securities reported herein as being beneficially owned by GrizzlyRock Capital, GrizzlyRock GP, the GrizzlyRock Fund and Mr. Mowery (collectively, the “GrizzlyRock Group“) do not include any securities held by the Vivaldi Group (as defined below), except as provided below.

Vivaldi Asset Management, LLC (“Vivaldi“) is an investment adviser registered with the SEC that provides investment advisory services to, among others, (i) certain series of Investment Managers Series Trust II, a registered investment company, specifically the WV Concentrated Equities Fund and the Vivaldi Multi-Strategy Fund, (ii) The Relative Value Fund, a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “Investment Company Act“),  and (iii) the Vivaldi Opportunities Fund, a Maryland corporation registered under the Investment Company Act (collectively, the “Client Accounts“).  As investment adviser to the Client Accounts, Vivaldi has the authority to invest the funds of the Client Accounts in securities (including shares of Common Stock of the Issuer) as well as the authority to purchase, vote and dispose of securities (including the 1,021,124 shares of Common Stock of the Issuer held by the Client Accounts), and may thus be deemed the beneficial owner of the shares of the Issuer’s Common Stock held in the Client Accounts.  Vivaldi does not own any Common Stock for its own account and disclaims beneficial ownership of the shares of Common Stock reported herein.  The securities reported herein as being beneficially owned by Vivaldi do not include any securities held by the GrizzlyRock Group.

Vivaldi Holdings, LLC (“Vivaldi Holdings“, and collectively with Vivaldi, the “Vivaldi Group“) controls Vivaldi.  By virtue of its control of Vivaldi, Vivaldi Holdings may be deemed to have a beneficial interest in the 1,021,124 shares of the Issuer’s Common Stock held by Vivaldi on behalf of the Client Accounts.  Vivaldi Holdings does not own any Common Stock for its own account and disclaims beneficial ownership of the shares of Common Stock reported herein.  Information regarding the executive officers and managing members of Vivaldi Holdings is set forth on Annex 1 attached hereto and incorporated herein by reference.  The securities reported herein as being beneficially owned by Vivaldi Holdings do not include any securities held by the GrizzlyRock Group.

As a portfolio manager of the Client Accounts, Mr.Mowery may direct the vote and disposition of the 1,021,124 shares of Common Stock that the Client Accounts hold.

The GrizzlyRock Group, Mr. Mowery and the Vivaldi Group may be deemed to constitute a “group” for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended to date (the “Exchange Act“).  Each of these parties expressly disclaims beneficial ownership of securities held by the other parties, except as otherwise provided herein.

Item 2.

Identity and Background.

The parties identified in the list below constitute the GrizzlyRock Group:

·	GrizzlyRock Capital, LLC, a Delaware limited liability company and investment adviser to GrizzlyRock Institutional Value Partners, LP.

·	GrizzlyRock GP, LLC, a Delaware limited liability company and general partner of GrizzlyRock Institutional Value Partners, LP.

·	GrizzlyRock Institutional Value Partners, LP, a Delaware limited partnership.

·	Kyle Mowery as the Managing Member of GrizzlyRock Capital, LLC and GrizzlyRock GP, LLC, and as a portfolio manager of the WV Concentrated Equities Fund, the Vivaldi Multi-Strategy Fund, The Relative Value Fund and the Vivaldi Opportunities Fund.

The parties identified in the list below constitute the Vivaldi Group:

·	Vivaldi Asset Management, LLC, a Delaware limited liability company and registered investment adviser to the Client Accounts.

·	Vivaldi Holdings, LLC, a Delaware limited liability company and control person of Vivaldi Asset Management, LLC.

This statement is filed by Mr. Mowery, with respect to the shares of Common Stock beneficially owned by him, as follows: (1) shares of Common Stock held in the name of the GrizzlyRock Fund by virtue of Mr. Mowery’s capacity as Managing Member of GrizzlyRock Capital and GrizzlyRock GP; and (2) shares of Common Stock held in the name of the Client Accounts by virtue of Mr. Mowery’s capacity as Portfolio Manager of those accounts.

(b) – (c) The principal business address of each of GrizzlyRock Capital, GrizzlyRock GP, the GrizzlyRock Fund and Mr. Mowery is 191 N. Wacker Drive, Suite 1500, Chicago, IL  60606.  Each of GrizzlyRock Capital, GrizzlyRock GP and the GrizzlyRock Fund are engaged in various interests, including investments. The principal employment of Mr. Mowery is (1) private investor, (2) serving as the Managing Member of GrizzlyRock Capital and GrizzlyRock GP and (3) serving as a Portfolio Manager of Vivaldi.

The principal business address of each of Vivaldi and Vivaldi Holdings is 225 W. Wacker Drive, Suite 2100, Chicago, IL  60606.  Vivaldi is engaged in various interests, including investments.  Vivaldi Holdings is a holding company.

Item 3.

Source and Amount of Funds or Other Consideration.

The Common Stock was acquired in open market purchases with (1) the working capital of the GrizzlyRock Fund; and (2) the funds of the Client Accounts.  The aggregate amount of funds expended, excluding commissions, to acquire shares held by the GrizzlyRock Fund is $3,502,682; and by the Client Accounts is $11,607,613.

Item 4.

Purpose of Transaction.

The Reporting Persons purchased the Common Stock for investment purposes.  Their intent is to influence the policies of the Issuer and assert shareholder rights, with a goal of maximizing the value of the Common Stock.  In connection therewith, the Reporting Persons request that the Issuer disclose all material steps undertaken by J.P Morgan in its role as the Issuer’s financial advisor (as initially disclosed by the Issuer during its shareholder call on  August 4, 2017), no later than the Issuer’s shareholder call currently scheduled for Friday, November 3, 2017. The Reporting Persons have sought (without success to date) and will continue to seek an opportunity to meet with the Issuer’s management team and Board of Directors to engage in constructive and value-enhancing dialogue.

The Reporting Persons may make further purchases of shares of Common Stock (including through a 10b5-1 plan). The Reporting Persons may dispose of any or all the shares of Common Stock held by them.

To the extent the actions described herein may be deemed to constitute a “control purpose” with respect to the Securities Exchange Act of 1934, as amended, and the regulations thereunder, the Reporting Persons have such a purpose. Except as noted in this Schedule 13D, none of the Reporting Persons currently has any plans or proposals, which relate to, or would result in, any of the matters referred to in paragraphs (a) through (j), inclusive of Item (4) of Schedule 13D. Such individuals may, at any time and from time to time, review or reconsider their positions and formulate plans or proposals with respect thereto.

Item 5.

Interests in Securities of the Issuer.

(1)

GrizzlyRock Capital is the investment adviser to and GrizzlyRock GP is the general partner of the GrizzlyRock Fund.  Each has voting and dispositive power with regard to the 301,133 shares of Common Stock held by the GrizzlyRock Fund.  Because Mr. Mowery is the Managing Member of GrizzlyRock Capital and GrizzlyRock GP, he has the power to direct the affairs of GrizzlyRock Capital and GrizzlyRock GP.  Therefore, GrizzlyRock Capital and GrizzlyRock GP may be deemed to share with Mr. Mowery voting and dispositive power with regard to the 301,133 shares of Common Stock held by the GrizzlyRock Fund.

(2)

Because Mr. Mowery is the Managing Member of GrizzlyRock Capital and GrizzlyRock GP, the investment adviser to and the general partner of the GrizzlyRock Fund, respectively, he has the power to direct the affairs of the GrizzlyRock Fund, including the voting and disposition of 301,133 shares of Common Stock held in the name of the GrizzlyRock Fund.  Therefore, Mr. Mowery is deemed to share voting and dispositive power with respect to the 301,133 shares of Common Stock held by the GrizzlyRock Fund.  Because Mr. Mowery is the Portfolio Manager for the Client Accounts, he has voting and dispositive power with regard to the 1,021,124 shares of Common Stock held by the Client Accounts.  Mr. Mowery specifically disclaims beneficial ownership of all such shares.

(3)

Vivaldi, as investment adviser to the Client Accounts, may be deemed to have shared voting and dispositive power with respect to 1,021,124 shares of Common Stock.  Vivaldi Holdings, as a control person of Vivaldi, may be deemed to have shared voting and dispositive power with respect to 1,021,124 shares of Common Stock and may thus be deemed the indirect beneficial owner of the shares beneficially owned by Vivaldi.  Vivaldi and Vivaldi Holdings specifically disclaim beneficial ownership of such shares.

Item 6.

Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

With respect to the GrizzlyRock Fund, GrizzlyRock Capital is entitled to a management fee based upon a percentage of total capital, and GrizzlyRock GP is entitled to an allocation of a portion of profits, if any.

Vivaldi is the investment adviser to the Client Accounts pursuant to investment advisory agreements that provide Vivaldi with the authority to (i) invest the funds of the Client Accounts in securities (including shares of Common Stock of the Issuer), (ii) hold, vote and dispose of securities (including shares of Common Stock of the Issuer), and (iii) file this statement.

Other than the foregoing agreements and arrangements, and the Joint Filing Agreement filed as Exhibit 1 to this Schedule 13D, there are no contracts, arrangements, understandings or relationships among the persons named in Item 2 hereof and between such persons and any person with respect to any securities of the Issuer.

SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

EXHIBIT 99.1

JOINT FILING AGREEMENT

In accordance with Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended, the undersigned agree to the joint filing on behalf of each of them of a Statement on Schedule 13D (including any and all amendments thereto) with respect to the Common Stock, $0.01 par value per share, of Potbelly Corporation and further agree that this Joint Filing Agreement shall be included as an exhibit to such joint filing.

The undersigned further agree that each party hereto is responsible for the timely filing of such Statement on Schedule 13D and any amendments thereto, and for the accuracy and completeness of the information concerning such party contained therein; provided, however, that no party is responsible for the accuracy or completeness of the information concerning any other party, unless such party knows or has reason to believe that such information is inaccurate.

This Joint Filing Agreement may be signed in counterparts with the same effect as if the signature on each counterpart were upon the same instrument.