UPDATE 1-Judge combines Reserve Primary Fund lawsuits

NEW YORK, Aug 26 (Reuters) - A federal judge on Wednesday combined 12 lawsuits over the Reserve Primary Fund, once worth $62 billion, which is being liquidated following Lehman Brothers Holdings Inc's LEHMQ.PK bankruptcy.

U.S. District Judge Paul Gardephe named Third Avenue Institutional International Value Fund LP, part of the Third Avenue fund family overseen by value investor Martin Whitman, lead plaintiff in the 12 consolidated class-action lawsuits.

The judge’s move comes a day after unpaid Reserve Primary Fund investors learned they might recover more money than they thought.

Gardephe said the Third Avenue fund’s financial stake in the case “dwarfs” that of any other proposed lead plaintiff.

The judge also said that because Reserve Primary has already distributed more than 85 percent of its assets, it would create “waste” and reduce shareholder recoveries to allow multiple lawsuits.

The Third Avenue fund is represented by Bernstein Litowitz Berger & Grossmann LLP, which was designated lead counsel.

On Tuesday, Reserve Primary said each unpaid investor in the fund could receive as much as 99 cents on the dollar, up from the 98.5 cents it had previously projected.

Money market mutual funds are designed to maintain a constant $1 per share net asset value. Reserve Primary became the first such fund in more than a decade to “break the buck.”

The fund held about $785 million of Lehman debt when that investment bank filed for bankruptcy protection. The Chapter 11 filing triggered a shareholder run on the Reserve fund.

The consolidated case is In re The Reserve Primary Fund Securities & Derivative Class Action Litigation, U.S. District Court, Southern District of New York (Manhattan), No. 08-8060. (Reporting by Jonathan Stempel. Editing by Robert MacMillan)