Reserve Funds has begun making distributions to shareholders of its Primary Fund at an initial rate of 50 cents on the dollar, and its president said 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 a share.
The fund is mailing checks to retail direct shareholders and wiring payments to other investors.
"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 fund's advisor. "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 fund's holdings at amortized cost as quickly as possible. There is approximately $25 billion in assets remaining in the fund.
(c) 2008 Money Management Executive and SourceMedia, Inc. All Rights Reserved.
http://www.mmexecutive.com http://www.sourcemedia.com/
