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Reserve Primary Fund Starts $1 Billion Distribution

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The Reserve Management Company said that it began distributing on October 2 about $1 billion, or 22% of the Reserve Primary Fund’s remaining asset value, to fund shareholders, marking the fifth such distribution to shareholders since the Primary Fund broke the buck on September 16, 2008. Reserve President Bruce Bent said in a statement that “We continue to work as quickly as possible to finalize the liquidation of the Fund while treating all shareholders equitably. Thank you for your patience.”

The distribution will leave about $3.5 billion in the Reserve Fund, which includes the Fund’s worthless Lehman Brothers securities that forced it to break the buck, which in turn is blamed by many for the financial crisis that came to a head just a year ago.

The company said that once this latest distribution is made, about 92% of the Fund’s assets as of September 15, 2008, will have been returned to the Fund’s shareholders.