The Reserve announced last week that its Primary Fund (the Fund) would be making a second distribution to shareholders equal to $185 million in response to its “breaking the buck” and suspending distributions in September of last year. The Fund had previously made an initial distribution of $26 million in October, and intends to continue making distributions from the assets of the fund on a pro rata basis. In its announcement, the Reserve specified that this second distribution consists of approximately 52% of the remaining Fund assets, and represents principal distributions only.

In addition to the second distribution, the Reserve also announced last week that it had set aside approximately $3.5 billion for a “special reserve” that it had previously announced in December as part of its plan for the Fund’s liquidation. The funds set aside in the special reserve will be used primary for damages and lawsuits related to regulatory actions, costs of legal defense, indemnification and advancement of legal fees for the Fund’s officers and trustees, plaintiffs’ attorney’s fees and extraordinary expenses.