X0303 4 2009-06-12 1 0001373641 Highland Distressed Opportunities, Inc. HCD 0001167365 HIGHLAND CAPITAL MANAGEMENT LP 13455 NOEL ROAD SUITE 800 DALLAS TX 75240 0 0 0 1 Investment Adviser 0001228922 DONDERO JAMES D 13455 NOEL ROAD SUITE 800 DALLAS TX 75240 0 1 0 0 President Common Shares par value $0.001 per share 2009-06-12 4 D 0 864988.17 0.00 D 0 I See footnotes Disposed of pursuant to an Agreement and Plan of Merger and Liquidation between the Issuer, Highland Credit Strategies Fund ("HCF") and HCF Acquisition LLC in exchange for 399,044.99 shares of HCF common stock having a net asset value of $6.28 per share on the effective date of the reorganization plus cash for fractional shares. This statement is filed by and on behalf of each of the following persons (collectively, the "Reporting Persons"): Highland Capital Management, L.P. ("Highland Capital") and James D. Dondero. Mr. Dondero is the President and a director of Strand Advisors, Inc. ("Strand"), the general partner of Highland Capital; he may be deemed to beneficially own shares owned and/or held for the account of and/or for the benefit of Strand and/or Highland. See Exhibit 99.1 Joint Filer Agreement /s/ James D. Dondero 2009-06-16 James D. Dondero 2009-06-16