Highland Capital CDO Fund Is Insolvent, Wiping Out Investors

[katty]

more: http://www.bloomberg.com/apps/news?pid=20601087&sid=a1MrBhVi9fmA&refer=home

Highland Capital CDO Fund Is Insolvent, Wiping Out Investors

By Miles Weiss

Feb. 20 (Bloomberg) -- Highland Capital Management LP, the investment firm founded by James Dondero and Mark Okada, said one of its hedge funds was wiped out by losses on high-risk debt securities, at least its third fund since October to close.

The managers and directors of Highland CDO Opportunity Fund LP, comprised of a U.S. partnership and an offshore affiliate, determined that “it is in the best interests” of the fund to wind down, according to a Feb. 4 letter to investors. Remaining assets will be distributed to creditors, leaving nothing for shareholders.

Highland Capital, based in Dallas, said in October it would shutter its flagship Crusader Fund, which had declined about 30 percent during the year, and its Credit Strategies fund. That month, Barclays Capital Inc. seized $642 million of leveraged loans from the firm, which oversees $33 billion.

[LSparkle]

1. Oh the yellow rose of Texas ... is withering on the vine ...

And wiping out its shareholders, right on down the line ...

[county worker]

2. I'd like to see some stats on how many investors who lost money here believed in

unfettered free market capitalism and how many of those now want regulation to protect what they have left.