MARATHON ASSET MANAGEMENT LP Form 4 Filed 2024-02-08

FORM 4

☐	Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934, Section 17(a) of the Public Utility Holding Company Act of 1935 or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person ^*

MARATHON ASSET MANAGEMENT LP

2. Issuer Name and Ticker or Trading Symbol
ATI Physical Therapy, Inc. [ATIP]

5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

__X__ Director	__X__ 10% Owner
_____ Officer (give title below)	_____ Other (specify below)

(Last)

(First)

(Middle)

ONE BRYANT PARK, 38TH FLOOR

3. Date of Earliest Transaction (Month/Day/Year)
01/30/2024

(Street)

NEW YORK, NY 10036

(City)

(State)

(Zip)

4. If Amendment, Date Original Filed(Month/Day/Year)

6. Individual or Joint/Group Filing(Check applicable line)

______ Form Filed by One Reporting Person
__X__ Form Filed by More than One Reporting Person

Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	3. Transaction Code (Instr. 8)		4. Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)			5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4)	6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
1.Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Series B Preferred Stock	01/30/2024		A⁽¹⁾		8,000⁽¹⁾	A	$ 0 ⁽¹⁾	49,725	I	See Footnote⁽⁶⁾
Series A Preferred Stock								50,000	I	See Footnote⁽⁶⁾

Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)

1. Title of Derivative Security
(Instr. 3)

2. Conversion or Exercise Price of Derivative Security

3. Transaction Date (Month/Day/Year)

3A. Deemed Execution Date, if any (Month/Day/Year)

4. Transaction Code
(Instr. 8)

5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4, and 5)

6. Date Exercisable and Expiration Date (Month/Day/Year)

7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4)

8. Price of Derivative Security (Instr. 5)

9. Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)

10. Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11. Nature of Indirect Beneficial Ownership (Instr. 4)

Code

(A)

(D)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

Convertible PIK Notes (Delayed Draw)

⁽³⁾⁽⁴⁾

01/30/2024

A⁽²⁾

640,000⁽²⁾⁽⁵⁾

⁽³⁾⁽⁴⁾

Class A Common Stock

640,000⁽²⁾⁽⁵⁾

⁽²⁾

640,000⁽⁵⁾

See Footnote⁽⁶⁾

Reporting Owners

Reporting Owner Name / Address	Relationships
Reporting Owner Name / Address	Director	10% Owner	Officer	Other
MARATHON ASSET MANAGEMENT LP ONE BRYANT PARK 38TH FLOOR NEW YORK, NY 10036	X	X
Marathon Asset Management GP, L.L.C. ONE BRYANT PARK 38TH FLOOR NEW YORK, NY 10036	X	X
MARATHON DISTRESSED CREDIT MASTER FUND ONE BRYANT PARK 38TH FLOOR NEW YORK, NY 10036	X	X
MCSP Sub, LLC ONE BRYANT PARK 38TH FLOOR NEW YORK, NY 10036	X	X
MARATHON STEPSTONE MASTER FUND LP ONE BRYANT PARK 38TH FLOOR NEW YORK, NY 10036	X	X
Richards Bruce J ONE BRYANT PARK 38TH FLOOR NEW YORK, NY 10036	X	X
Hanover Louis ONE BRYANT PARK 38TH FLOOR NEW YORK, NY 10036	X	X

Explanation of Responses:

1.	Reflects the issuance of shares of Series B Preferred Stock by the Issuer to the Marathon Funds (as defined below) on January 30, 2024 in connection with the issuance of the Delayed Draw Notes (as described below) in accordance with the terms of that certain Note Purchase Agreement, dated as of April 17, 2023 (as subsequently amended (the "NPA").
2.	Reflects the issuance of senior second lien convertible PIK delayed draw notes (the "Delayed Draw Notes") by the Issuer to the Marathon Funds on January 30, 2024. The aggregate principal amount of the Delayed Draw Notes is $8,000,000, and the Delayed Draw Notes accrue interest at a rate of 8.00% per annum.
3.	Subject to earlier conversion in accordance with their terms, the Delayed Draw Notes will become due and payable on August 24, 2028 (the "Maturity Date") in an amount equal to the principal amount of the Delayed Draw Notes outstanding on such date (plus any accrued but unpaid interest thereon).
4.	All or any portion of the Delayed Draw Notes may be converted at the election of the Reporting Persons at any time prior to the close of business on the business day immediately preceding the Maturity Date into a number of shares of Common Stock of the Issuer, determined by dividing (a) the outstanding balance of the principal amount of the Notes being converted (together with the accrued but unpaid interest thereon) as of the applicable conversion date, by (b) a conversion price of $12.50, which such conversion price is subject to certain anti-dilution adjustments in accordance with the terms of the NPA.
5.	This number represents the number of shares of Common Stock issuable upon conversion of the Delayed Draw Notes if the Reporting Persons elect to convert the Delayed Draw Notes based on the principal amount of the Delayed Draw Notes (as described in footnote 2 above) and the conversion price (as described in footnote 4 above).
6.	Marathon Asset Management, L.P. ("Marathon"), as the investment manager of each of MAM PT, LLC ("MAM"), MCSP SUB LLC ("Empire"), Marathon Distressed Credit Master Fund ("MDCF") and Marathon Stepstone Master Fund LP ("StepStone" and, together with MAM, Empire, MDCF, the "Marathon Funds"), has the sole power to vote and direct the disposition of all the reported securities held by the Marathon Funds. Accordingly, Marathon may be deemed to beneficially own such reported securities. The general partner of Marathon is Marathon Asset Management GP, L.L.C. Bruce Richards and Louis Hanover are the managing members of Marathon Asset Management GP, L.L.C. and, thus, may be deemed to beneficially own the reported securities held by the Marathon Funds. This report is not an admission that any Reporting Person beneficially owns the reported securities. Each Reporting Person disclaims beneficial ownership of the reported securities except to the extent of its pecuniary interest therein.
Remarks: For purposes of Section 16 of the Securities Exchange Act of 1934, as amended, the Reporting Persons may be deemed to be "directors by deputization" of the Issuer by virtue of their representative(s) on the Issuer's board of directors. Exhibit 99 - Joint Filer Statement

	Signatures
	Marathon Asset Management, L.P., by: /s/ Jamie Raboy, Authorized Signatory	02/08/2024
	Marathon Asset Management, GP, L.L.C., by: /s/ Jamie Raboy, Authorized Signatory	02/08/2024
	Marathon Distressed Credit Master Fund, by: /s/ Marathon Asset Management L.P., solely in its capacity as Investment Manager, by Jamie Raboy, Authorized Signatory	02/08/2024
	MCSP Sub LLC., by: /s/ Marathon Asset Management L.P., solely in its capacity as Investment Manager, by Jamie Raboy, Authorized Signatory	02/08/2024
	Marathon StepStone Master Fund LP, by: /s/ Marathon Asset Management L.P., solely in its capacity as Investment Manager, by Jamie Raboy, Authorized Signatory	02/08/2024
	/s/ Bruce Richards	02/08/2024
	/s/ Louis Hanover	02/08/2024
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
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Exhibit 99

Joint Filer Information

Each of the following joint filers has designated Marathon Asset Management, L.P. as the “Designated Filer” for purposes of the attached Form 4:

Marathon Asset Management GP, L.L.C.

One Bryant Park, 38th Floor

New York, NY 10036

Marathon Distressed Credit Master Fund

One Bryant Park, 38th Floor

New York, NY 10036

MCSP Sub LLC

One Bryant Park, 38th Floor

New York, NY 10036

Marathon StepStone Master Fund LP

One Bryant Park, 38th Floor

New York, NY 10036

Bruce Richards

One Bryant Park, 38th Floor

New York, NY 10036

Louis Hanover

One Bryant Park, 38th Floor

New York, NY 10036

Date of Event Requiring Statement: January 30, 2024

Issuer Name and Ticker or Trading Symbol: ATI PHYSICAL THERAPY, INC. [ ATIP ]

Marathon Asset Management, L.P., by: /s/ Jamie Raboy, Authorized Signatory	2/8/2024
Marathon Asset Management, GP, L.L.C., by: /s/ Jamie Raboy, Authorized Signatory	2/8/2024
Marathon Distressed Credit Master Fund, by: /s/ Marathon Asset Management L.P., solely in its capacity as Investment Manager, by Jamie Raboy, Authorized Signatory	2/8/2024
MCSP Sub LLC., by: /s/ Marathon Asset Management L.P., solely in its capacity as Investment Manager, by Jamie Raboy, Authorized Signatory	2/8/2024
Marathon StepStone Master Fund LP, by: /s/ Marathon Asset Management L.P., solely in its capacity as Investment Manager, by Jamie Raboy, Authorized Signatory	2/8/2024
/s/ Bruce Richards	2/8/2024
/s/ Louis Hanover	2/8/2024

Date: February 8, 2024