Highland Income Fund
Item G.1.a.i. - Legal Proceedings

Two affiliated funds, including the Highland Income
Fund (f/k/a Highland Floating Rate Opportunities
Fund), are the beneficiaries of an approximately
$122 million judgment against Credit Suisse related
to a syndicated real estate transaction fraudulently
underwritten by the Swiss bank.  The judgment was
appealed up to the Dallas Court of Appeals, then the
Texas Supreme Court, remanded to the trial court,
and is back to the Dallas Court of Appeals.  The two
funds also are participants in a similar action
against Credit Suisse related to five additional
real estate deals in which the funds allege Credit
Suisse committed fraud in relation to the
underwriting.