The Reserve Management Company has begun making distributions to shareholders at an initial rate of 50 cents on the dollar, and its president says the company plans to pay the rest soon.
The company is distributing $26 billion of a total $51 billion to shareholders of its Primary Fund, more than six weeks after the company first announced that the money market mutual fund broke the buck on Sept. 16 by falling below $1.00 a share.
The fund began mailing checks to retail direct shareholders on Thursday and started wire payments to other shareholders on Friday. Each investor is getting about 50% of their current account balance, the fund said.
This distribution marks a significant step in the process of liquidating the Primary Fund and distributing money back to shareholders, said Bruce Bent, president of Reserve Management, the funds adviser. We are committed to making future distributions when more cash becomes available.
The fund said it will post a plan for the total liquidation of assets on its website in the coming days. It said it is focused on liquidating the funds holdings at amortized cost as quickly as possible. There are approximately $25 billion in assets remaining in the fund.