NEW YORK, Nov 25 (Reuters) - The estimated $3.5 billion remaining assets of the Reserve Primary Fund should be distributed on a pro-rated basis to shareholders, a U.S. judge ruled on Wednesday in lawsuits brought over the fund's value dropping below $1 a share in the financial crisis.
Manhattan Federal Court Judge Paul Gardephe said he would order the appointment of a magistrate judge to oversee the distribution.
He said in a written ruling that the U.S. Securities and Exchange Commission and the fund's trustee estimate that investors would recover 99 cents per share if remaining assets were distributed pro rata.
The Primary Fund held $785 million worth of Lehman Brothers Holdings Incissued commercial paper when Lehman went bankrupt on Sept. 15 last year. "Breaking the buck" is not supposed to happen to money market funds, which have been regarded as super-safe investments.
The judge's ruling said the net asset values struck on Sept. 15-16, 2008 were "not reliable". Gardephe said he would issue an injunction barring all claims against Reserve Management Co, founder Bruce Bent, his son and others to the extent such claims are subject to indemnification by the Fund.
The case is Securities and Exchange Commission v Reserve Management Company Inc et al, U.S. District Court for the Southern District of New York No. 09-4346

(Reporting by Jonathan Stempel, Grant McCool and Rachelle Younglai in Washington; editing by Carol Bishopric) Keywords: RESERVEFUND/ (grant.mccool@thomsonreuters.com; +1-212-393-9461; Reuters Messaging: grant.mccool.reuters.com@reuters.net)

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