Lawyers for two Bermuda-based entities will appear in a New York state Supreme Court today in a legal action which has led to a freeze on redemptions from Reserve Management Co's International Liquidity Fund.

Dow Jones Newswire reported on Wednesday that Caxton International Ltd and Caxton Equity Growth Holdings LP filed the court action against money market fund provider Reserve Management Co on October 8.

The Caxton entities are shareholders in the International Liquidity Fund, an offshore fund.

According to the Dow Jones Newswire they have "asked that a receiver be appointed to perform an accounting of Reserve International Liquidity Fund's current net assets and net asset value on a daily basis from September 12 to the present. They also sought a receiver to oversee the sale of any securities from the fund, oversee the processing of redemption requests and prepare a preliminary report setting a schedule for proceeding with a liquidation of assets."

The Caxton companies filed the action against the fund, its parent firm, founder Bruce Bent, Bruce Bent II and Arthur Bent III. The International Liquidity Fund portfolio held $2.3 billion as of yesterday.

New York-based Reserve Management Co is also facing 11 legal actions with regard to its Primary Fund, according to the company's October 6 filing with the US Securities and Exchange Commission. All relate to the Primary Fund's holding of debt securities issued by now-bankrupt Lehman Brothers Holdings Inc.

Reserve Management had planned to distribute $20 billion — 32 percent of the funds total assets — based on each account holder's balance on September 15 from the Primary Fund on Monday but the distribution was delayed. "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 timeframe," the company said on its website, adding it would post an update for investors on the situation daily. The Primary Fund is the world's third largest money market mutual fund.

Among those seeking legal action in relation to the Primary Fund is Ameriprise, which had 300,000 clients with accounts in the Primary Fund.

Ameriprise claims Reserve Management tipped off large clients while letting smaller fund account holders suffer.