In these turbulent times, such harsh tactics are being used by other mutual fund companies as well. A day after Lehman Brothers filed bankruptcy, the Primary Fund and two offshore funds "broke the buck," which meant that it couldn't repay shareholders the $1 per share price. "This seems to be the tactic that fund companies are taking these days--being a little heavy handed and getting this behind them as quickly as possible and forcing investors, if they take a reasonable deal, to maybe give up some of their rights," says Don Phillips, managing director, corporate strategy, Research, and communications at Morningstar. Indeed, "some people will contest" such tactics, Phillips says, but for smaller investors who likely just want their cash back, they aren't likely to consider a court battle as a "fight worth fighting."
Ming Lee Hatch, communications manager for the Reserve Funds, says "the last part of the liquidation plan, which is how much everyone is going to get ultimately, is not currently addressed in the plan." Those assets, she says, are still being determined and Reserve expects to announce this information in a matter of weeks.