Friday's testimony marked the end of the evidence phase of the trial against the Bents. Monday should be the start of closing arguments... except it might not be.

Like everything else in New York, the trial could be delayed due to Hurricane Sandy, which is expected to hit the city Monday and Tuesday.

To read the full, continuing saga of the collapse of the Reserve Primary Fund and the ensuing legal battle, see MFWire's living timeline.

The civil fraud case took a cerebral turn today as attorneys questioned witnesses on who knew what, and when, during the critical board meetings on September 15 and 16, 2008, following the implosion of Lehman Brothers.

In particular, attorneys on both sides tried to pin down what Reserve executives told board members regarding the Reserve's [profile] efforts to stay alive, whether the firm was in danger of collapse, and the debate over suspending redemptions. Attorneys also tried to ferret out more details of what the Bents did, and were aware of, regarding the Reserve Primary Fund's plans for a credit support agreement.

Int today's session, the last day for evidence in the trial, attorneys quizzed Stroock attorney Joel Goldberg, who during the Lehman collapse was a Wilkie Farr corporate partner serving as corporate counsel for Reserve, a role he had held for two-years by 2008. Goldberg, with roughly 40 years of legal experience, once served as the director of the investment management division of the SEC.

Also on the witness stand was Ronald Artinian, who in the 1990s served as an executive vice president and national sales manager of institutional debt sales for Smith Barney and has been, and still is, an independent trustee of the Reserve Fund since 2006.

Goldberg Testimony

The quizzing of Goldberg, who was also on the witness stand the previous day, focused on what he actually discussed with the Bents during those two days and what the Bents intended-- and understood.

For example, government attorneys asked Goldberg about his discussions with Bent II regarding the investor disclosures about plans for a credit support agreement to support the failing Reserve Fund. On the stand, Goldberg said that Bent II had questions regarding what was "permissible" with regards to these disclosures, wanting advice to make sure the younger Bent did not "run afoul" of regulations.

They did not expressly discuss the alleged credit support agreement itself, Goldberg said. He also said that he did not provide any advice at all on the subject.

Goldberg was repeatedly quizzed on whether the Bents understood how a credit support agreement worked.

Goldberg responded to these questions in this manner:

We didn't specifically talk on the subject but I saw them as sophisticated investors who understood the issues involved.

When pressed further on the Bents' level of understanding of the subject, Goldberg had this to say:

I understood they would understand the concept. [Goldberg soon qualified this comment with "rather than the mechanics."]

Understanding the concept of a credit support agreement, Goldberg said on the stand, would include understanding the purpose of such an agreement, the meaning of the dollar amount, and the rights of the fund, among other things.

When asked about the $10 million figure used in disclosures about the promised credit support agreement, Goldberg said "I recall having an impression that a number was inserted for pro forma purposes."

When asked about whether he had reviewed the disclosure letter before it was sent out on September 15th, Goldberg responded "I probably read it."

Artinian Testimony

Artinian's interrogation focused on his recollections of trustee board discussion on such subjects as the Bents' efforts to save the fund, the suspension of redemptions and whether the Reserve was a dead fund walking.

Artinian asserted that concern was raised about the survival of the Fund, but no recommendations or motions were raised about its liquidation. During those meetings, Artinian said, trustees still pushed the Bents to do all they could to save the fund.

Further, he said that there had been discussion on seeking suspension of redemptions in the fund, but that there was no such discussion on suspension of purchases, because the idea off anyone buying the fund after September 15 would have come as a "shock" to everyone on the board. 

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