UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 13F

FORM 13F COVER PAGE
OMB APPROVAL
OMB Number:3235-0006
Expires:July 31, 2015
Estimated average burden
hours per response:23.8
Report for the Calendar Year or Quarter Ended:
09-30-2014
Check here if Amendment: ☐ Amendment Number:
This Amendment (Check only one.):☐ is a restatement.
☐ adds new holdings entries.

Institutional Investment Manager Filing this Report:

Name:
Watershed Asset Management, L.L.C.
Address:
ONE MARITIME PLAZA
SUITE 1525
SAN FRANCISCO, CA 94111
Form 13F File Number:
028-11095

The institutional investment manager filing this report and the person by whom it is signed hereby represent that the person signing the report is authorized to submit it, that all information contained herein is true, correct and complete, and that it is understood that all required items, statements, schedules, lists, and tables, are considered integral parts of this form.


Person Signing this Report on Behalf of Reporting Manager:
Name:
Meridee A. Moore
Title:
Senior Managing Member
Phone:
415-391-8900


Signature, Place, and Date of Signing:

/s/ Meridee A. Moore
                         [Signature]
San Francisco, CALIFORNIA
                 [City, State]
11-11-2014
                           [Date]
                          

Report Type (Check only one.):

☒ 13F HOLDINGS REPORT. (Check here if all holdings of this reporting manager are reported in this report.) 

☐ 13F NOTICE. (Check here if no holdings reported are in this report, and all holdings are reported by other reporting manager(s).) 

☐ 13F COMBINATION REPORT. (Check here if a portion of the holdings for this reporting manager are reported in this report and a portion are reported by other reporting manager(s).)


Form 13F Summary Page

Report Summary:

Number of Other Included Managers:
1
Form 13F Information table Entry Total:
20
Form 13F Information table Value Total:
470540
          (thousands)

List of Other Included Managers:

Provide a numbered list of the name(s) and Form 13F file number(s) of all institutional investment managers with respect to which this report is filed, other than the manager filing this report.
[If there are no entries in this list, state "NONE" and omit the column headings and list entries.]

No.Form 13F File NumberNameCIK
1
028-11473
WS Partners, L.L.C.
0001315928


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 13F

FORM 13F INFORMATION TABLE
OMB APPROVAL
OMB Number:3235-0006
Expires:July 31, 2015
Estimated average burden
hours per response:23.8
COLUMN 1COLUMN 2COLUMN 3COLUMN 4COLUMN 5COLUMN 6COLUMN 7COLUMN 8
VALUESHRS ORSH/PUT/INVESTMENTOTHERVOTING AUTHORITY
NAME OF ISSUERTITLE OF CLASSCUSIP(x$1000)PRN AMTPRNCALLDISCRETIONMANAGERSOLESHAREDNONE
AMERICAN INTL GROUP INCCOM NEW0268747845,984110,771SHOTR110,771 0 0
AMERICAN RLTY CAP PPTYS INCCOM02917T10417,3511,438,715SHOTR1,438,715 0 0
ANADARKO PETE CORPCOM0325111078,03479,199SHOTR79,199 0 0
CBS OUTDOOR AMERS INCCOM14987J1065,761192,420SHOTR192,420 0 0
CLEAR CHANNEL OUTDOOR HLDGSCL A18451C1092,974441,193SHOTR441,193 0 0
CUSTOMERS BANCORP INCCOM23204G1006,408356,820SHOTR356,820 0 0
ENPRO INDS INCCOM29355X1076,938114,621SHOTR114,621 0 0
ERICKSON INCCOM29482P1008,189630,385SHOTR630,385 0 0
GRACE W R & CO DEL NEWCOM38388F1087,09277,987SHOTR77,987 0 0
ISHARESRUSSELL 2000 ETF46428765553,582490,000SHPutOTR490,000 0 0
ISHARESU.S. REAL ES ETF46428773948,440700,000SHPutOTR700,000 0 0
ISHARESIBOXX HI YD ETF464288513182,5211,985,000SHPutOTR1,985,000 0 0
KEY ENERGY SVCS INCCOM4929141064,360900,921SHOTR900,921 0 0
MERITOR INCCOM59001K1001,839169,500SHPutOTR169,500 0 0
NMI HLDGS INCCL A62920930543350,000SHOTR50,000 0 0
NORTEK INCCOM NEW6565593095,48173,569SHOTR73,569 0 0
PLY GEM HLDGS INCCOM72941W1004,774440,373SHOTR440,373 0 0
SILVER EAGLE ACQUISITION CORUNIT 99/99/99998276942094,671450,000SHOTR450,000 0 0
SPDR S&P 500 ETF TRTR UNIT78462F10391,614465,000SHPutOTR465,000 0 0
TESORO CORPCOM8816091014,09467,138SHOTR67,138 0 0