The Reserve announced yesterday that the distribution from the liquidation of the Reserve Primary Fund would not happen within the time frame previously planned.
The Reserve Management Co. Inc. announced yesterday that the distribution from the liquidation of the Reserve Primary Fund would not happen within the time frame previously planned.
“The process of determining accurately the number of shares each investor held in the Primary Fund has proven to be extremely complex and could not be completed in the originally anticipated time frame,” the New York-based firm announced in a statement. “This requires that each investor’s opening balance in the Primary Fund on Sept. 15 be adjusted to reflect permitted redemption transactions as well as any fund purchases effected through dividend reinvestment. In addition, we have asked our independent auditors, KPMG LLP [of New York] to perform certain procedures to provide additional assurance about the accuracy of each investor’s account balance information.”
The board voted to liquidate the fund soon after its net asset value dropped below $1, triggering a run on money market mutual funds. The fund broke the buck Sept. 16, due to exposure to debt from the bankrupt Lehman Brothers Holdings Inc. of New York.
The Reserve announced Sept. 29 that $20 billion from the fund would be distributed to investors by yesterday.
The firm noted that it will notify investors when the calculation process is complete and post an update on its website no later than Friday if the distribution has not been made.
