UNITED STATES BANKRUPTCY COURT FOR THE NORTHERN DISTRICT OF 

TEXAS, DALLAS DIVISION 

In Re: Highland Capital Management, L.P. § Case No. 19-34054-SGJ-11 

The Charitable DAF Fund LP § 

 Appellant § 22-03052 

vs. § 

Highland Capital Management, L.P. § 

 Appellee § 3:22-CV-02280-S

[43] Order granting amended motion to dismiss adversary proceeding with prejudice (related 

document # 19) Entered on 9/30/2022 

APPELLANT RECORD 

VOLUME 3 

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EXHIBIT 

Appx. 0182

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-1-

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

In re:

HIGHLAND CAPITAL MANAGEMENT, L.P.,1

Debtor. 

)

) 

) 

) 

) 

) 

)

Chapter 11 

Case No. 19-34054-sgj11

FIFTH AMENDED PLAN OF REORGANIZATION OF HIGHLAND 

CAPITAL MANAGEMENT, L.P. (AS MODIFIED)

PACHULSKI STANG ZIEHL & JONES LLP

Jeffrey N. Pomerantz (CA Bar No.143717) 

Ira D. Kharasch (CA Bar No. 109084) 

Gregory V. Demo (NY Bar No. 5371992) 

10100 Santa Monica Boulevard, 13th Floor 

Los Angeles, CA 90067 

Telephone: (310) 277-6910 

Facsimile: (310) 201-0760 

Email: jpomerantz@pszjlaw.com 

 ikharasch@pszjlaw.com 

gdemo@pszjlaw.com

HAYWARD & ASSOCIATES PLLC

Melissa S. Hayward (TX Bar No. 24044908) 

Zachery Z. Annable (TX Bar No. 24053075)

10501 N. Central Expy, Ste. 106 

Dallas, TX 75231 

Telephone: (972) 755-7100 

Facsimile: (972) 755-7110 

Email: MHayward@HaywardFirm.com

 ZAnnable@HaywardFirm.com: 

Counsel for the Debtor and Debtor-in-Possession

1 The Debtor’s last four digits of its taxpayer identification number are (6725). The headquarters and service 

address for the above-captioned Debtor is 300 Crescent Court, Suite 700, Dallas, TX 75201.

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 ̈1¤}HV5!6 -l«

1934054210122000000000013

Docket #1808 Date Filed: 01/22/2021

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000268

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- ii -

ARTICLE I. RULES OF INTERPRETATION, COMPUTATION OF TIME, 

GOVERNING LAW AND DEFINED TERMS .............................................. 1

A. Rules of Interpretation, Computation of Time and Governing Law ..................... 1

B. Defined Terms ...................................................................................................... 2

ARTICLE II. ADMINISTRATIVE EXPENSES AND PRIORITY TAX CLAIMS.................16

A. Administrative Expense Claims .......................................................................... 16

B. Professional Fee Claims ...................................................................................... 17

C. Priority Tax Claims ............................................................................................. 18

ARTICLE III. CLASSIFICATION AND TREATMENT OF CLASSIFIED CLAIMS 

AND EQUITY INTERESTS ......................................................................... 18

A. Summary ............................................................................................................. 18

B. Summary of Classification and Treatment of Classified Claims and 

Equity Interests ................................................................................................... 19

C. Elimination of Vacant Classes ............................................................................ 19

D. Impaired/Voting Classes ..................................................................................... 19

E. Unimpaired/Non-Voting Classes ........................................................................ 19

F. Impaired/Non-Voting Classes ............................................................................. 19

G. Cramdown ........................................................................................................... 19

H. Classification and Treatment of Claims and Equity Interests ............................. 20

I. Special Provision Governing Unimpaired Claims .............................................. 24

J. Subordinated Claims ........................................................................................... 25

ARTICLE IV. MEANS FOR IMPLEMENTATION OF THIS PLAN ..................................... 25

A. Summary ............................................................................................................. 25

B. The Claimant Trust ............................................................................................. 26

1. Creation and Governance of the Claimant Trust and Litigation SubTrust. ................................................................................................................... 26

2. Claimant Trust Oversight Committee ................................................................. 27

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000269

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- iii -

3. Purpose of the Claimant Trust. ........................................................................... 27

4. Purpose of the Litigation Sub-Trust. ................................................................... 28

5. Claimant Trust Agreement and Litigation Sub-Trust Agreement. ...................... 28

6. Compensation and Duties of Trustees. ............................................................... 29

7. Cooperation of Debtor and Reorganized Debtor. .............................................. 30

8. United States Federal Income Tax Treatment of the Claimant Trust. ................ 30

9. Tax Reporting......................................................................................................30

10. Claimant Trust Assets. ........................................................................................ 31

11. Claimant Trust Expenses. ................................................................................... 31

12. Trust Distributions to Claimant Trust Beneficiaries. ......................................... 31

13. Cash Investments. ............................................................................................... 31

14. Dissolution of the Claimant Trust and Litigation Sub-Trust. ............................. 32

C. The Reorganized Debtor ..................................................................................... 32

1. Corporate Existence............................................................................................32

2. Cancellation of Equity Interests and Release ..................................................... 33

3. Issuance of New Partnership Interests ............................................................... 33

4. Management of the Reorganized Debtor ............................................................ 33

5. Vesting of Assets in the Reorganized Debtor ...................................................... 34

6. Purpose of the Reorganized Debtor .................................................................... 34

7. Distribution of Proceeds from the Reorganized Debtor Assets; Transfer 

of Reorganized Debtor Assets ............................................................................. 34

D. Company Action ................................................................................................. 34

E. Release of Liens, Claims and Equity Interests....................................................35

F. Cancellation of Notes, Certificates and Instruments........................................... 36

G. Cancellation of Existing Instruments Governing Security Interests ................... 36

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000270

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H. Control Provisions .............................................................................................. 36

I. Treatment of Vacant Classes .............................................................................. 36

J. Plan Documents .................................................................................................. 36

K. Highland Capital Management, L.P. Retirement Plan and Trust ....................... 37

ARTICLE V. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED 

LEASES ......................................................................................................... 37

A. Assumption, Assignment, or Rejection of Executory Contracts and 

Unexpired Leases ................................................................................................ 37

B. Claims Based on Rejection of Executory Contracts or Unexpired 

Leases .................................................................................................................. 38

C. Cure of Defaults for Assumed or Assigned Executory Contracts and 

Unexpired Leases ................................................................................................ 39

ARTICLE VI. PROVISIONS GOVERNING DISTRIBUTIONS ............................................. 39

A. Dates of Distributions ......................................................................................... 39

B. Distribution Agent .............................................................................................. 40

C. Cash Distributions ............................................................................................... 41

D. Disputed Claims Reserve .................................................................................... 41

E. Distributions from the Disputed Claims Reserve ............................................... 41

F. Rounding of Payments ........................................................................................ 41

G. De Minimis Distribution ..................................................................................... 41

H. Distributions on Account of Allowed Claims ..................................................... 42

I. General Distribution Procedures ......................................................................... 42

J. Address for Delivery of Distributions................................................................. 42

K. Undeliverable Distributions and Unclaimed Property ........................................ 42

L. Withholding Taxes .............................................................................................. 43

M. Setoffs ................................................................................................................. 43

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000271

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-vN. Surrender of Cancelled Instruments or Securities .............................................. 43

O. Lost, Stolen, Mutilated or Destroyed Securities ................................................. 43

ARTICLE VII. PROCEDURES FOR RESOLVING CONTINGENT, 

UNLIQUIDATED AND DISPUTED CLAIMS ............................................ 44

A. Filing of Proofs of Claim .................................................................................... 44

B. Disputed Claims .................................................................................................. 44

C. Procedures Regarding Disputed Claims or Disputed Equity Interests ............... 44

D. Allowance of Claims and Equity Interests .......................................................... 44

1. Allowance of Claims ........................................................................................... 45

2. Estimation ........................................................................................................... 45

3. Disallowance of Claims ...................................................................................... 45

ARTICLE VIII. EFFECTIVENESS OF THIS PLAN ............................................................... 46

A. Conditions Precedent to the Effective Date ........................................................ 46

B. Waiver of Conditions .......................................................................................... 47

C. Effect of Non-Occurrence of Conditions to EffectivenessError! Bookmark not defined.

D. Dissolution of the Committee ............................................................................. 47

ARTICLE IX. EXCULPATION, INJUNCTION AND RELATED PROVISIONS ................. 48

A. General ................................................................................................................ 48

B. Discharge of Claims ............................................................................................ 48

C. Exculpation ......................................................................................................... 48

D. Releases by the Debtor........................................................................................49

E. Preservation of Rights of Action......................................................................... 50

1. Maintenance of Causes of Action ....................................................................... 50

2. Preservation of All Causes of Action Not Expressly Settled or Released ........... 50

F. Injunction ............................................................................................................ 51

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G. Term of Injunctions or Stays............................................................................... 52

H. Continuance of January 9 Order ......................................................................... 52

ARTICLE X. BINDING NATURE OF PLAN .......................................................................... 52

ARTICLE XI. RETENTION OF JURISDICTION .................................................................... 53

ARTICLE XII. MISCELLANEOUS PROVISIONS ................................................................. 55

A. Payment of Statutory Fees and Filing of Reports ............................................... 55

B. Modification of Plan ........................................................................................... 55

C. Revocation of Plan .............................................................................................. 55

D. Obligations Not Changed .................................................................................... 56

E. Entire Agreement ................................................................................................ 56

F. Closing of Chapter 11 Case ................................................................................ 56

G. Successors and Assigns....................................................................................... 56

H. Reservation of Rights .......................................................................................... 56

I. Further Assurances..............................................................................................57

J. Severability ......................................................................................................... 57

K. Service of Documents ......................................................................................... 57

L. Exemption from Certain Transfer Taxes Pursuant to Section 1146(a) of 

the Bankruptcy Code........................................................................................... 58

M. Governing Law ................................................................................................... 59

N. Tax Reporting and Compliance .......................................................................... 59

O. Exhibits and Schedules ....................................................................................... 59

P. Controlling Document ........................................................................................ 59

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DEBTOR’S CHAPTER 11 PLAN OF REORGANIZATION

HIGHLAND CAPITAL MANAGEMENT, L.P., as debtor and debtor-in-possession in 

the above-captioned case (the “Debtor”), proposes the following chapter 11 plan of 

reorganization (the “Plan”) for, among other things, the resolution of the outstanding Claims 

against, and Equity Interests in, the Debtor. Unless otherwise noted, capitalized terms used in 

this Plan have the meanings set forth in Article I of this Plan. The Debtor is the proponent of this 

Plan within the meaning of section 1129 of the Bankruptcy Code. 

Reference is made to the Disclosure Statement (as such term is defined herein and 

distributed contemporaneously herewith) for a discussion of the Debtor’s history, business, 

results of operations, historical financial information, projections and assets, and for a summary 

and analysis of this Plan and the treatment provided for herein. There also are other agreements 

and documents that may be Filed with the Bankruptcy Court that are referenced in this Plan or 

the Disclosure Statement as Exhibits and Plan Documents. All such Exhibits and Plan 

Documents are incorporated into and are a part of this Plan as if set forth in full herein. Subject 

to the other provisions of this Plan, and in accordance with the requirements set forth in 

section 1127 of the Bankruptcy Code and Bankruptcy Rule 3019, the Debtor reserves the right to 

alter, amend, modify, revoke, or withdraw this Plan prior to the Effective Date. 

If this Plan cannot be confirmed, for any reason, then subject to the terms set forth herein, 

this Plan may be revoked. 

ARTICLE I.

RULES OF INTERPRETATION, COMPUTATION OF TIME, 

GOVERNING LAW AND DEFINED TERMS 

A. Rules of Interpretation, Computation of Time and Governing Law 

For purposes hereof: (a) in the appropriate context, each term, whether stated in the 

singular or the plural, shall include both the singular and the plural, and pronouns stated in the 

masculine, feminine or neuter gender shall include the masculine, feminine and the neuter 

gender; (b) any reference herein to a contract, lease, instrument, release, indenture or other 

agreement or document being in a particular form or on particular terms and conditions means 

that the referenced document, as previously amended, modified or supplemented, if applicable, 

shall be substantially in that form or substantially on those terms and conditions; (c) any 

reference herein to an existing document or exhibit having been Filed or to be Filed shall mean 

that document or exhibit, as it may thereafter be amended, modified or supplemented in 

accordance with its terms; (d) unless otherwise specified, all references herein to “Articles,” 

“Sections,” “Exhibits” and “Plan Documents” are references to Articles, Sections, Exhibits and 

Plan Documents hereof or hereto; (e) unless otherwise stated, the words “herein,” “hereof,” 

“hereunder” and “hereto” refer to this Plan in its entirety rather than to a particular portion of this 

Plan; (f) captions and headings to Articles and Sections are inserted for convenience of reference 

only and are not intended to be a part of or to affect the interpretation hereof; (g) any reference to 

an Entity as a Holder of a Claim or Equity Interest includes such Entity’s successors and assigns; 

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(h) the rules of construction set forth in section 102 of the Bankruptcy Code shall apply; (i) any 

term used in capitalized form herein that is not otherwise defined but that is used in the 

Bankruptcy Code or the Bankruptcy Rules shall have the meaning assigned to that term in the 

Bankruptcy Code or the Bankruptcy Rules, as the case may be; and (j) “$” or “dollars” means 

Dollars in lawful currency of the United States of America. The provisions of Bankruptcy 

Rule 9006(a) shall apply in computing any period of time prescribed or allowed herein. 

B. Defined Terms

Unless the context otherwise requires, the following terms shall have the following 

meanings when used in capitalized form herein: 

1. “Acis” means collectively Acis Capital Management, L.P. and Acis Capital 

Management GP, LLP.

2. “Administrative Expense Claim” means any Claim for costs and expenses of 

administration of the Chapter 11 Case that is Allowed pursuant to sections 503(b), 507(a)(2), 

507(b) or 1114(2) of the Bankruptcy Code, including, without limitation, (a) the actual and 

necessary costs and expenses incurred after the Petition Date and through the Effective Date of 

preserving the Estate and operating the business of the Debtor; and (b) all fees and charges 

assessed against the Estate pursuant to sections 1911 through 1930 of chapter 123 of title 28 of 

the United States Code, and that have not already been paid by the Debtor during the Chapter 11 

Case and a Professional Fee Claim.

3. “Administrative Expense Claims Bar Date” means, with respect to any 

Administrative Expense Claim (other than a Professional Fee Claim) becoming due on or prior to 

the Effective Date, 5:00 p.m. (prevailing Central Time) on such date that is forty-five days after 

the Effective Date. 

4. “Administrative Expense Claims Objection Deadline” means, with respect to 

any Administrative Expense Claim, the later of (a) ninety (90) days after the Effective Date and 

(b) sixty (60) days after the timely Filing of the applicable request for payment of such 

Administrative Expense Claim; provided, however, that the Administrative Expense Claims 

Objection Deadline may be extended by the Bankruptcy Court upon a motion by the Claimant 

Trustee.

5. “Affiliate” of any Person means any Entity that, with respect to such Person, 

either (i) is an “affiliate” as defined in section 101(2) of the Bankruptcy Code, or (ii) is an 

“affiliate” as defined in Rule 405 of the Securities Act of 1933, or (iii) directly or indirectly, 

through one or more intermediaries, controls, is controlled by, or is under common control with, 

such Person. For the purposes of this definition, the term “control” (including, without 

limitation, the terms “controlled by” and “under common control with”) means the possession,

directly or indirectly, of the power to direct or cause the direction in any respect of the 

management or policies of a Person, whether through the ownership of voting securities, by 

contract, or otherwise.

6. “Allowed” means, with respect to any Claim, except as otherwise provided in 

the Plan: (a) any Claim that is evidenced by a Proof of Claim that has been timely Filed by the 

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Bar Date, or that is not required to be evidenced by a Filed Proof of Claim under the Bankruptcy 

Code or a Final Order; (b) a Claim that is listed in the Schedules as not contingent, not 

unliquidated, and not disputed and for which no Proof of Claim has been timely filed; (c) a 

Claim Allowed pursuant to the Plan or an order of the Bankruptcy Court that is not stayed 

pending appeal; or (d) a Claim that is not Disputed (including for which a Proof of Claim has 

been timely filed in a liquidated and noncontingent amount that has not been objected to by the 

Claims Objection Deadline or as to which any such objection has been overruled by Final 

Order); provided, however, that with respect to a Claim described in clauses (a) and (b) above, 

such Claim shall be considered Allowed only if and to the extent that, with respect to such 

Claim, no objection to the allowance thereof has been interposed within the applicable period of 

time fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules, or the Bankruptcy Court, or 

such an objection is so interposed and the Claim shall have been Allowed as set forth above. 

7. “Allowed Claim or Equity Interest” means a Claim or an Equity Interest of the 

type that has been Allowed.

8. “Assets” means all of the rights, titles, and interest of the Debtor, Reorganized 

Debtor, or Claimant Trust, in and to property of whatever type or nature, including, without 

limitation, real, personal, mixed, intellectual, tangible, and intangible property, the Debtor’s 

books and records, and the Causes of Action. 

9. “Available Cash” means any Cash in excess of the amount needed for the 

Claimant Trust and Reorganized Debtor to maintain business operations as determined in the 

sole discretion of the Claimant Trustee.

10. “Avoidance Actions” means any and all avoidance, recovery, subordination or 

other actions or remedies that may be brought by and on behalf of the Debtor or its Estate under 

the Bankruptcy Code or applicable nonbankruptcy law, including, without limitation, actions or 

remedies arising under sections 502, 510, 544, 545, and 547-553 of the Bankruptcy Code or 

under similar state or federal statutes and common law, including fraudulent transfer laws

11. “Ballot” means the form(s) distributed to holders of Impaired Claims or 

Equity Interests entitled to vote on the Plan on which to indicate their acceptance or rejection of 

the Plan.

12. “Bankruptcy Code” means title 11 of the United States Code, 11 U.S.C. 

§§ 101-1532, as amended from time to time and as applicable to the Chapter 11 Case. 

13. “Bankruptcy Court” means the United States Bankruptcy Court for the 

Northern District of Texas, Dallas Division, or any other court having jurisdiction over the 

Chapter 11 Case.

14. “Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure and the 

Local Rules of Bankruptcy Practice and Procedure of the United States Bankruptcy Court for the 

Northern District of Texas, Dallas Division, in each case as amended from time to time and as 

applicable to the Chapter 11 Case.

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000276

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15. “Bar Date” means the applicable deadlines set by the Bankruptcy Court for 

the filing of Proofs of Claim against the Debtor as set forth in the Bar Date Order, which 

deadlines may be or have been extended for certain Claimants by order of the Bankruptcy Court. 

16. “Bar Date Order” means the Order (I) Establishing Bar Dates for Filing 

Proofs of Claim and (II) Approving the Form and Manner of Notice Thereof [D.I. 488]. 

17. “Business Day” means any day, other than a Saturday, Sunday or “legal 

holiday” (as defined in Bankruptcy Rule 9006(a)). 

18. “Cash” means the legal tender of the United States of America or the 

equivalent thereof. 

19. “Causes of Action” means any action, claim, cross-claim, third-party claim, 

cause of action, controversy, demand, right, Lien, indemnity, contribution, guaranty, suit, 

obligation, liability, debt, damage, judgment, account, defense, remedy, offset, power, privilege, 

license and franchise of any kind or character whatsoever, in each case whether known, 

unknown, contingent or non-contingent, matured or unmatured, suspected or unsuspected, 

liquidated or unliquidated, disputed or undisputed, foreseen or unforeseen, direct or indirect, 

choate or inchoate, secured or unsecured, assertable directly or derivatively (including, without 

limitation, under alter ego theories), whether arising before, on, or after the Petition Date, in 

contract or in tort, in law or in equity or pursuant to any other theory of law. For the avoidance 

of doubt, Cause of Action includes, without limitation,: (a) any right of setoff, counterclaim or 

recoupment and any claim for breach of contract or for breach of duties imposed by law or in 

equity; (b) the right to object to Claims or Equity Interests; (c) any claim pursuant to section 362 

or chapter 5 of the Bankruptcy Code; (d) any claim or defense including fraud, mistake, duress 

and usury, and any other defenses set forth in section 558 of the Bankruptcy Code; (e) any claims 

under any state or foreign law, including, without limitation, any fraudulent transfer or similar 

claims; (f) the Avoidance Actions, and (g) the Estate Claims. The Causes of Action include, 

without limitation, the Causes of Action belonging to the Debtor’s Estate listed on the schedule 

of Causes of Action to be filed with the Plan Supplement. 

20. “CEO/CRO” means James P. Seery, Jr., the Debtor’s chief executive officer 

and chief restructuring officer. 

21. “Chapter 11 Case” means the Debtor’s case under chapter 11 of the 

Bankruptcy Code commenced on the Petition Date in the Delaware Bankruptcy Court and 

transferred to the Bankruptcy Court on December 4, 2019, and styled In re Highland Capital 

Management, L.P., Case No. 19-34054-sgj-11. 

22. “Claim” means any “claim” against the Debtor as defined in section 101(5) of 

the Bankruptcy Code. 

23. “Claims Objection Deadline” means the date that is 180 days after the 

Confirmation Date; provided, however, the Claims Objection Deadline may be extended by the 

Bankruptcy Court upon a motion by the Claimant Trustee. 

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24. “Claimant Trust” means the trust established for the benefit of the Claimant 

Trust Beneficiaries on the Effective Date in accordance with the terms of this Plan and the 

Claimant Trust Agreement.

25. “Claimant Trust Agreement” means the agreement Filed in the Plan 

Supplement establishing and delineating the terms and conditions of the Claimant Trust. 

26. “Claimant Trust Assets” means (i) other than the Reorganized Debtor Assets 

(which are expressly excluded from this definition), all other Assets of the Estate, including, but 

not limited to, all Causes of Action, Available Cash, any proceeds realized or received from such 

Assets, all rights of setoff, recoupment, and other defenses with respect, relating to, or arising 

from such Assets, (ii) any Assets transferred by the Reorganized Debtor to the Claimant Trust on 

or after the Effective Date, (iii) the limited partnership interests in the Reorganized Debtor, and 

(iv) the ownership interests in New GP LLC. For the avoidance of doubt, any Causes of Action 

that, for any reason, are not capable of being transferred to the Claimant Trust shall constitute 

Reorganized Debtor Assets. 

27. “Claimant Trust Beneficiaries” means the Holders of Allowed General 

Unsecured Claims, Holders of Allowed Subordinated Claims, including, upon Allowance, 

Disputed General Unsecured Claims and Disputed Subordinated Claims that become Allowed 

following the Effective Date, and, only upon certification by the Claimant Trustee that the 

Holders of such Claims have been paid indefeasibly in full plus, to the extent all Allowed 

unsecured Claims, excluding Subordinated Claims, have been paid in full, post-petition interest 

from the Petition Date at the Federal Judgment Rate in accordance with the terms and conditions 

set forth in the Claimant Trust Agreement and all Disputed Claims in Class 8 and Class 9 have 

been resolved, Holders of Allowed Class B/C Limited Partnership Interests, and Holders of 

Allowed Class A Limited Partnership Interests.

28. “Claimant Trustee” means James P. Seery, Jr., the Debtor’s chief executive 

officer and chief restructuring officer, or such other Person identified in the Plan Supplement 

who will act as the trustee of the Claimant Trust in accordance with the Plan, the Confirmation 

Order, and Claimant Trust Agreement or any replacement trustee pursuant to (and in accordance 

with) the Claimant Trust Agreement. The Claimant Trustee shall be responsible for, among 

other things, monetizing the Estate’s investment assets, resolving Claims (other than those 

Claims assigned to the Litigation Sub-Trust for resolution), and, as the sole officer of New GP 

LLC, winding down the Reorganized Debtor’s business operations. 

29. “Claimant Trust Expenses” means all reasonable legal and other reasonable 

professional fees, costs, and expenses incurred by the Trustees on account of administration of 

the Claimant Trust, including any reasonable administrative fees and expenses, reasonable 

attorneys’ fees and expenses, reasonable insurance costs, taxes, reasonable escrow expenses, and 

other expenses. 

30. “Claimant Trust Interests” means the non-transferable interests in the 

Claimant Trust that are issued to the Claimant Trust Beneficiaries pursuant to this Plan; 

provided, however, Holders of Class A Limited Partnership Interests, Class B Limited 

Partnership Interests, and Class C Limited Partnership Interests will not be deemed to hold 

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000278

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Claimant Trust Interests unless and until the Contingent Claimant Trust Interests distributed to 

such Holders vest in accordance with the terms of this Plan and the Claimant Trust Agreement. 

31. “Claimant Trust Oversight Committee” means the committee of five Persons 

established pursuant to ARTICLE IV of this Plan to oversee the Claimant Trustee’s performance 

of its duties and otherwise serve the functions described in this Plan and the Claimant Trust 

Agreement. 

32. “Class” means a category of Holders of Claims or Equity Interests as set forth 

in ARTICLE III hereof pursuant to section 1122(a) of the Bankruptcy Code. 

33. “Class A Limited Partnership Interest” means the Class A Limited Partnership 

Interests as defined in the Limited Partnership Agreement held by The Dugaboy Investment 

Trust, Mark and Pamela Okada Family Trust – Exempt Trust 2, Mark and Pamela Okada – 

Exempt Descendants’ Trust, and Mark Kiyoshi Okada, and the General Partner Interest. 

34. “Class B Limited Partnership Interest” means the Class B Limited Partnership 

Interests as defined in the Limited Partnership Agreement held by Hunter Mountain Investment 

Trust. 

35. “Class B/C Limited Partnership Interests” means, collectively, the Class B 

Limited Partnership and Class C Limited Partnership Interests.

36. “Class C Limited Partnership Interest” means the Class C Limited Partnership 

Interests as defined in the Limited Partnership Agreement held by Hunter Mountain Investment 

Trust.

37. “Committee” means the Official Committee of Unsecured Creditors 

appointed by the U.S. Trustee pursuant to 11 U.S.C. § 1102(a)(1) on October 29, 2019 [D.I. 65], 

consisting of (i) the Redeemer Committee of Highland Crusader Fund, (ii) Meta-e Discovery, 

(iii) UBS, and (iv) Acis. 

38. “Confirmation Date” means the date on which the clerk of the Bankruptcy 

Court enters the Confirmation Order on the docket of the Bankruptcy Court. 

39. “Confirmation Hearing” means the hearing held by the Bankruptcy Court 

pursuant to section 1128 of the Bankruptcy Code to consider confirmation of this Plan, as such 

hearing may be adjourned or continued from time to time. 

40. “Confirmation Order” means the order of the Bankruptcy Court confirming 

this Plan pursuant to section 1129 of the Bankruptcy Code. 

41. “Convenience Claim” means any prepetition, liquidated, and unsecured 

Claim against the Debtor that as of the Confirmation Date is less than or equal to $1,000,000 or 

any General Unsecured Claim that makes the Convenience Class Election. For the avoidance of 

doubt, the Reduced Employee Claims will be Convenience Claims. 

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000279

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42. “Convenience Claim Pool” means the $13,150,000 in Cash that shall be 

available upon the Effective Date for distribution to Holders of Convenience Claims under the 

Plan as set forth herein. Any Cash remaining in the Convenience Claim Pool after all 

distributions on account of Convenience Claims have been made will be transferred to the 

Claimant Trust and administered as a Claimant Trust Asset. 

43. “Convenience Class Election” means the option provided to each Holder of a 

General Unsecured Claim that is a liquidated Claim as of the Confirmation Date on their Ballot 

to elect to reduce their claim to $1,000,000 and receive the treatment provided to Convenience 

Claims.

44. “Contingent Claimant Trust Interests” means the contingent Claimant Trust 

Interests to be distributed to Holders of Class A Limited Partnership Interests, Holders of Class B 

Limited Partnership Interests, and Holders of Class C Limited Partnership Interests in 

accordance with this Plan, the rights of which shall not vest, and consequently convert to 

Claimant Trust Interests, unless and until the Claimant Trustee Files a certification that all 

holders of Allowed General Unsecured Claims have been paid indefeasibly in full, plus, to the 

extent all Allowed unsecured Claims, excluding Subordinated Claims, have been paid in full, all 

accrued and unpaid post-petition interest from the Petition Date at the Federal Judgment Rate

and all Disputed Claims in Class 8 and Class 9 have been resolved. As set forth in the Claimant 

Trust Agreement, the Contingent Claimant Trust Interests distributed to the Holders of Class A 

Limited Partnership Interests will be subordinated to the Contingent Claimant Trust Interests 

distributed to the Holders of Class B/C Limited Partnership Interests.

45. “Debtor” means Highland Capital Management, L.P. in its capacity as debtor 

and debtor in possession in the Chapter 11 Case. 

46. “Delaware Bankruptcy Court” means the United States Bankruptcy Court for 

the District of Delaware.

47. “Disclosure Statement” means that certain Disclosure Statement for Debtor’s 

Fifth Amended Chapter 11 Plan of Reorganization, as amended, supplemented, or modified from 

time to time, which describes this Plan, including all exhibits and schedules thereto and 

references therein that relate to this Plan. 

48. “Disputed” means with respect to any Claim or Equity Interest, any Claim or

Equity Interest that is not yet Allowed. 

49. “Disputed Claims Reserve” means the appropriate reserve(s) or account(s) to 

be established on the Initial Distribution Date and maintained by the Claimant Trustee for 

distributions on account of Disputed Claims that may subsequently become an Allowed Claim.

50. “Disputed Claims Reserve Amount” means, for purposes of determining the 

Disputed Claims Reserve, the Cash that would have otherwise been distributed to a Holder of a 

Disputed Claim at the time any distributions of Cash are made to the Holders of Allowed Claims. 

The amount of the Disputed Claim upon which the Disputed Claims Reserve is calculated shall 

be: (a) the amount set forth on either the Schedules or the filed Proof of Claim, as applicable; (b) 

the amount agreed to by the Holder of the Disputed Claim and the Claimant Trustee or 

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000280

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Reorganized Debtor, as applicable; (c) the amount ordered by the Bankruptcy Court if it enters 

an order disallowing, in whole or in part, a Disputed Claim; or (d) as otherwise ordered by the 

Bankruptcy Court, including an order estimating the Disputed Claim. 

51. “Distribution Agent” means the Claimant Trustee, or any party designated by 

the Claimant Trustee to serve as distribution agent under this Plan. 

52. “Distribution Date” means the date or dates determined by the Reorganized 

Debtor or the Claimant Trustee, as applicable, on or after the Initial Distribution Date upon 

which the Distribution Agent shall make distributions to holders of Allowed Claims and Interests 

entitled to receive distributions under the Plan. 

53. “Distribution Record Date” means the date for determining which Holders of 

Claims and Equity Interests are eligible to receive distributions hereunder, which date shall be 

the Effective Date or such later date determined by the Bankruptcy Court. 

54. “Effective Date” means the Business Day that this Plan becomes effective as 

provided in ARTICLE VIII hereof.

55. “Employees” means the employees of the Debtor set forth in the Plan 

Supplement. 

56. “Enjoined Parties” means (i) all Entities who have held, hold, or may hold 

Claims against or Equity Interests in the Debtor (whether or not proof of such Claims or Equity 

Interests has been filed and whether or not such Entities vote in favor of, against or abstain from 

voting on the Plan or are presumed to have accepted or deemed to have rejected the Plan), (ii) 

James Dondero (“Dondero”), (iii) any Entity that has appeared and/or filed any motion, 

objection, or other pleading in this Chapter 11 Case regardless of the capacity in which such 

Entity appeared and any other party in interest, (iv) any Related Entity, and (v) the Related 

Persons of each of the foregoing. 

57. “Entity” means any “entity” as defined in section 101(15) of the Bankruptcy 

Code and also includes any Person or any other entity. 

58. “Equity Interest” means any Equity Security in the Debtor, including, without 

limitation, all issued, unissued, authorized or outstanding partnership interests, shares, of stock or 

limited company interests, the Class A Limited Partnership Interests, the Class B Limited 

Partnership Interests, and the Class C Limited Partnership Interests.

59. “Equity Security” means an “equity security” as defined in section 101(16) of 

the Bankruptcy Code. 

60. “Estate” means the bankruptcy estate of the Debtor created by virtue of 

section 541 of the Bankruptcy Code upon the commencement of the Chapter 11 Case.

61. “Estate Claims” has the meaning given to it in Exhibit A to the Notice of 

Final Term Sheet [D.I. 354]. 

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000281

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62. “Exculpated Parties” means, collectively, (i) the Debtor and its successors and 

assigns, direct and indirect majority-owned subsidiaries, and the Managed Funds, (ii) the 

Employees, (iii) Strand, (iv) the Independent Directors, (v) the Committee, (vi) the members of 

the Committee (in their official capacities), (vii) the Professionals retained by the Debtor and the 

Committee in the Chapter 11 Case, (viii) the CEO/CRO; and (ix) the Related Persons of each of 

the parties listed in (iv) through (viii); provided, however, that, for the avoidance of doubt, none 

of James Dondero, Mark Okada, NexPoint Advisors, L.P. (and any of its subsidiaries and 

managed entities), the Charitable Donor Advised Fund, L.P. (and any of its subsidiaries, 

including CLO Holdco, Ltd., and managed entities), Highland CLO Funding, Ltd. (and any of its 

subsidiaries, members, and managed entities), Highland Capital Management Fund Advisors, 

L.P. (and any of its subsidiaries and managed entities), NexBank, SSB (and any of its 

subsidiaries), the Hunter Mountain Investment Trust (or any trustee acting for the trust), the 

Dugaboy Investment Trust (or any trustee acting for the trust), or Grant Scott is included in the 

term “Exculpated Party.”

63. “Executory Contract” means a contract to which the Debtor is a party that is 

subject to assumption or rejection under sections 365 or 1123 of the Bankruptcy Code. 

64. “Exhibit” means an exhibit annexed hereto or to the Disclosure Statement (as 

such exhibits are amended, modified or otherwise supplemented from time to time), which are 

incorporated by reference herein.

65. “Federal Judgment Rate” means the post-judgment interest rate set forth in 28 

U.S.C. § 1961 as of the Effective Date. 

66. “File” or “Filed” or “Filing” means file, filed or filing with the Bankruptcy 

Court or its authorized designee in the Chapter 11 Case.

67. “Final Order” means an order or judgment of the Bankruptcy Court, which is 

in full force and effect, and as to which the time to appeal, petition for certiorari, or move for a 

new trial, reargument or rehearing has expired and as to which no appeal, petition for certiorari,

or other proceedings for a new trial, reargument or rehearing shall then be pending or as to which 

any right to appeal, petition for certiorari, new trial, reargument, or rehearing shall have been 

waived in writing in form and substance satisfactory to the Debtor, the Reorganized Debtor, or 

the Claimant Trustee, as applicable, or, in the event that an appeal, writ of certiorari, new trial, 

reargument, or rehearing thereof has been sought, such order of the Bankruptcy Court shall have 

been determined by the highest court to which such order was appealed, or certiorari, new trial, 

reargument or rehearing shall have been denied and the time to take any further appeal, petition 

for certiorari, or move for a new trial, reargument or rehearing shall have expired; provided, 

however, that the possibility that a motion under Rule 60 of the Federal Rules of Civil Procedure, 

or any analogous rule under the Bankruptcy Rules, may be Filed with respect to such order shall 

not preclude such order from being a Final Order. 

68. “Frontier Secured Claim” means the loan from Frontier State Bank to the 

Debtor in the principal amount of $7,879,688.00 made pursuant to that certain First Amended 

and Restated Loan Agreement, dated March 29, 2018. 

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000282

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10

69. “General Partner Interest” means the Class A Limited Partnership Interest 

held by Strand, as the Debtor’s general partner. 

70. “General Unsecured Claim” means any prepetition Claim against the Debtor 

that is not Secured and is not a/an: (a) Administrative Expense Claim; (b) Professional Fee 

Claim; (c) Priority Tax Claim; (d) Priority Non-Tax Claim; or (e) Convenience Claim. 

71. “Governmental Unit” means a “governmental unit” as defined in 

section 101(27) of the Bankruptcy Code. 

72. “GUC Election” means the option provided to each Holder of a Convenience 

Claim on their Ballot to elect to receive the treatment provided to General Unsecured Claims. 

73. “Holder” means an Entity holding a Claim against, or Equity Interest in, the 

Debtor. 

74. “Impaired” means, when used in reference to a Claim or Equity Interest, a 

Claim or Equity Interest that is impaired within the meaning of section 1124 of the Bankruptcy 

Code. 

75. “Independent Directors” means John S. Dubel, James P. Seery, Jr., and 

Russell Nelms, the independent directors of Strand appointed on January 9, 2020, and any 

additional or replacement directors of Strand appointed after January 9, 2020, but prior to the 

Effective Date. 

76. “Initial Distribution Date” means, subject to the “Treatment” sections in 

ARTICLE III hereof, the date that is on or as soon as reasonably practicable after the Effective 

Date, when distributions under this Plan shall commence to Holders of Allowed Claims and 

Equity Interests.

77. “Insurance Policies” means all insurance policies maintained by the Debtor as 

of the Petition Date.

78. “Jefferies Secured Claim” means any Claim in favor of Jefferies, LLC, arising 

under that certain Prime Brokerage Customer Agreement, dated May 24, 2013, between the 

Debtor and Jefferies, LLC, that is secured by the assets, if any, maintained in the prime 

brokerage account created by such Prime Brokerage Customer Agreement. 

79. “Lien” means a “lien” as defined in section 101(37) of the Bankruptcy Code 

and, with respect to any asset, includes, without limitation, any mortgage, lien, pledge, charge, 

security interest or other encumbrance of any kind, or any other type of preferential arrangement 

that has the practical effect of creating a security interest, in respect of such asset.

80. “Limited Partnership Agreement” means that certain Fourth Amended and 

Restated Agreement of Limited Partnership of Highland Capital Management, L.P., dated 

December 24, 2015, as amended. 

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000283

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81. “Litigation Sub-Trust” means the sub-trust established within the Claimant 

Trust or as a wholly –owned subsidiary of the Claimant Trust on the Effective Date in each case 

in accordance with the terms and conditions set forth in the Litigation Sub-Trust Agreement and 

Claimant Trust Agreement. As set forth in the Litigation Sub-Trust Agreement, the Litigation 

Sub-Trust shall hold the Claimant Trust Assets that are Estate Claims.

82. “Litigation Sub-Trust Agreement” means the agreement filed in the Plan 

Supplement establishing and delineating the terms and conditions of the Litigation Sub-Trust. 

83. “Litigation Trustee” means the trustee appointed by the Committee and 

reasonably acceptable to the Debtor who shall be responsible for investigating, litigating, and 

settling the Estate Claims for the benefit of the Claimant Trust in accordance with the terms and 

conditions set forth in the Litigation Sub-Trust Agreement. 

84. “Managed Funds” means Highland Multi-Strategy Credit Fund, L.P., 

Highland Restoration Capital Partners, L.P., and any other investment vehicle managed by the 

Debtor pursuant to an Executory Contract assumed pursuant to this Plan. 

85. “New Frontier Note” means that promissory note to be provided to the 

Allowed Holders of Class 2 Claims under this Plan and any other documents or security 

agreements securing the obligations thereunder. 

86. “New GP LLC” means a limited liability company incorporated in the State of 

Delaware pursuant to the New GP LLC Documents to serve as the general partner of the 

Reorganized Debtor on the Effective Date. 

87. “New GP LLC Documents” means the charter, operating agreement, and other 

formational documents of New GP LLC. 

88. “Ordinary Course Professionals Order” means that certain Order Pursuant to 

Sections 105(a), 327, 328, and 330 of the Bankruptcy Code Authorizing the Debtor to Retain, 

Employ, and Compensate Certain Professionals Utilized by the Debtor in the Ordinary Course 

[D.I. 176]. 

89. “Other Unsecured Claim” means any Secured Claim other than the Jefferies 

Secured Claim and the Frontier Secured Claim. 

90. “Person” means a “person” as defined in section 101(41) of the Bankruptcy 

Code and also includes any natural person, individual, corporation, company, general or limited 

partnership, limited liability company, unincorporated organization firm, trust, estate, business 

trust, association, joint stock company, joint venture, government, governmental agency, 

Governmental Unit or any subdivision thereof, the United States Trustee, or any other entity, 

whether acting in an individual, fiduciary or other capacity. 

91. “Petition Date” means October 16, 2019. 

92. “Plan” means this Debtor’s Fifth Amended Chapter 11 Plan of 

Reorganization, including the Exhibits and the Plan Documents and all supplements, appendices, 

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000284

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and schedules thereto, either in its present form or as the same may be altered, amended, 

modified or otherwise supplemented from time to time.

93. “Plan Distribution” means the payment or distribution of consideration to 

Holders of Allowed Claims and Allowed Equity Interests under this Plan. 

94. “Plan Documents” means any of the documents, other than this Plan, but 

including, without limitation, the documents to be filed with the Plan Supplement, to be 

executed, delivered, assumed, or performed in connection with the occurrence of the Effective 

Date, and as may be modified consistent with the terms hereof with the consent of the 

Committee. 

95. “Plan Supplement” means the ancillary documents necessary for the 

implementation and effectuation of the Plan, including, without limitation, (i) the form of 

Claimant Trust Agreement, (ii) the forms of New GP LLC Documents, (iii) the form of 

Reorganized Limited Partnership Agreement, (iv) the Sub-Servicer Agreement (if applicable), 

(v) the identity of the initial members of the Claimant Trust Oversight Committee, (vi) the form 

of Litigation Sub-Trust Agreement; (vii) the schedule of retained Causes of Action; (viii) the 

New Frontier Note, (ix) the schedule of Employees; (x) the form of Senior Employee 

Stipulation,; and (xi) the schedule of Executory Contracts and Unexpired Leases to be assumed 

pursuant to this Plan, which, in each case, will be in form and substance reasonably acceptable to 

the Debtor and the Committee. 

96. “Priority Non-Tax Claim” means a Claim entitled to priority pursuant to 

section 507(a) of the Bankruptcy Code, including any Claims for paid time-off entitled to 

priority under section 507(a)(4) of the Bankruptcy Code, other than a Priority Tax Claim or an 

Administrative Claim.

97. “Pro Rata” means the proportion that (a) the Allowed amount of a Claim or 

Equity Interest in a particular Class bears to (b) the aggregate Allowed amount of all Claims or 

Equity Interests in such Class. 

98. “Professional” means (a) any Entity employed in the Chapter 11 Case 

pursuant to section 327, 328 363 or 1103 of the Bankruptcy Code or otherwise and (b) any Entity 

seeking compensation or reimbursement of expenses in connection with the Chapter 11 Case 

pursuant to sections 327, 328, 330, 331, 363, 503(b), 503(b)(4) and 1103 of the Bankruptcy 

Code. 

99. “Professional Fee Claim” means a Claim under sections 328, 330(a), 331, 

363, 503 or 1103 of the Bankruptcy Code, with respect to a particular Professional, for 

compensation for services rendered or reimbursement of costs, expenses or other charges 

incurred after the Petition Date and prior to and including the Effective Date. 

100. “Professional Fee Claims Bar Date” means with respect to Professional 

Fee Claims, the Business Day which is sixty (60) days after the Effective Date or such other date 

as approved by order of the Bankruptcy Court. 

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000285

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101. “Professional Fee Claims Objection Deadline” means, with respect to any 

Professional Fee Claim, thirty (30) days after the timely Filing of the applicable request for 

payment of such Professional Fee Claim. 

102. “Professional Fee Reserve” means the reserve established and funded by 

the Claimant Trustee pursuant this Plan to provide sufficient funds to satisfy in full unpaid 

Allowed Professional Fee Claims.

103. “Proof of Claim” means a written proof of Claim or Equity Interest Filed 

against the Debtor in the Chapter 11 Case.

104. “Priority Tax Claim” means any Claim of a Governmental Unit of the 

kind specified in section 507(a)(8) of the Bankruptcy Code. 

105. “Protected Parties” means, collectively, (i) the Debtor and its successors 

and assigns, direct and indirect majority-owned subsidiaries, and the Managed Funds, (ii) the 

Employees, (iii) Strand, (iv) the Reorganized Debtor, (v) the Independent Directors, (vi) the 

Committee, (vii) the members of the Committee (in their official capacities), (viii) the Claimant 

Trust, (ix) the Claimant Trustee, (x) the Litigation Sub-Trust, (xi) the Litigation Trustee, (xii) the 

members of the Claimant Trust Oversight Committee (in their official capacities), (xiii) New GP 

LLC, (xiv) the Professionals retained by the Debtor and the Committee in the Chapter 11 Case, 

(xv) the CEO/CRO; and (xvi) the Related Persons of each of the parties listed in (iv) through 

(xv); provided, however, that, for the avoidance of doubt, none of James Dondero, Mark Okada, 

NexPoint Advisors, L.P. (and any of its subsidiaries and managed entities), the Charitable Donor 

Advised Fund, L.P. (and any of its subsidiaries, including CLO Holdco, Ltd., and managed 

entities), Highland CLO Funding, Ltd. (and any of its subsidiaries, members, and managed 

entities), NexBank, SSB (and any of its subsidiaries), Highland Capital Management Fund 

Advisors, L.P. (and any of its subsidiaries and managed entities), the Hunter Mountain 

Investment Trust (or any trustee acting for the trust), the Dugaboy Investment Trust (or any 

trustee acting for the trust), or Grant Scott is included in the term “Protected Party.”

106. “PTO Claims” means any Claim for paid time off in favor of any Debtor 

employee in excess of the amount that would qualify as a Priority Non-Tax Claim under section 

507(a)(4) of the Bankruptcy Code. 

107. “Reduced Employee Claims” has the meaning set forth in ARTICLE IX.D. 

108. “Reinstated” means, with respect to any Claim or Equity Interest, (a) 

leaving unaltered the legal, equitable, and contractual rights to which a Claim entitles the Holder 

of such Claim or Equity Interest in accordance with section 1124 of the Bankruptcy Code or (b) 

notwithstanding any contractual provision or applicable law that entitles the Holder of such 

Claim or Equity Interest to demand or receive accelerated payment of such Claim or Equity 

Interest after the occurrence of a default: (i) curing any such default that occurred before or after 

the Petition Date, other than a default of a kind specified in section 365(b)(2) of the Bankruptcy 

Code or of a kind that section 365(b)(2) of the Bankruptcy Code expressly does not require to be 

cured; (ii) reinstating the maturity of such Claim or Equity Interest as such maturity existed 

before such default; (iii) compensating the Holder of such Claim or Equity Interest for any

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000286

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damages incurred as a result of any reasonable reliance by such Holder on such contractual 

provision or such applicable law; (iv) if such Claim or Equity Interest arises from any failure to 

perform a nonmonetary obligation, other than a default arising from failure to operate a nonresidential real property lease subject to section 365(b)(1)(A) of the Bankruptcy Code, 

compensating the Holder of such Claim or Equity Interest (other than any Debtor or an insider of 

any Debtor) for any actual pecuniary loss incurred by such Holder as a result of such failure; and 

(v) not otherwise altering the legal, equitable, or contractual rights to which such Claim entitles 

the Holder of such Claim. 

109. “Rejection Claim” means any Claim for monetary damages as a result of 

the rejection of an executory contract or unexpired lease pursuant to the Confirmation Order. 

110. “Related Entity” means, without duplication, (a) Dondero, (b) Mark Okada 

(“Okada”), (c) Grant Scott (“Scott”), (d) Hunter Covitz (“Covitz”), (e) any entity or person that 

was an insider of the Debtor on or before the Petition Date under Section 101(31) of the 

Bankruptcy Code, including, without limitation, any entity or person that was a non-statutory 

insider, (f) any entity that, after the Effective Date, is an insider or Affiliate of one or more of 

Dondero, Okada, Scott, Covitz, or any of their respective insiders or Affiliates, including, 

without limitation, The Dugaboy Investment Trust, (g) the Hunter Mountain Investment Trust 

and any of its direct or indirect parents, (h) the Charitable Donor Advised Fund, L.P., and any of 

its direct or indirect subsidiaries, and (i) Affiliates of the Debtor and any other Entities listed on 

the Related Entity List. 

111. “Related Entity List” means that list of Entities filed with the Plan

Supplement. 

112. “Related Persons” means, with respect to any Person, such Person’s 

predecessors, successors, assigns (whether by operation of law or otherwise), and each of their 

respective present, future, or former officers, directors, employees, managers, managing 

members, members, financial advisors, attorneys, accountants, investment bankers, consultants, 

professionals, advisors, shareholders, principals, partners, subsidiaries, divisions, management 

companies, heirs, agents, and other representatives, in each case solely in their capacity as such.

113. “Released Parties” means, collectively, (i) the Independent Directors; (ii) 

Strand (solely from the date of the appointment of the Independent Directors through the 

Effective Date); (iii) the CEO/CRO; (iv) the Committee; (v) the members of the Committee (in 

their official capacities), (vi) the Professionals retained by the Debtor and the Committee in the 

Chapter 11 Case; and (vii) the Employees. 

114. “Reorganized Debtor” means the Debtor, as reorganized pursuant to this 

Plan on and after the Effective Date. 

115. “Reorganized Debtor Assets” means any limited and general partnership 

interests held by the Debtor, the management of the Managed Funds and those Causes of Action 

(including, without limitation, claims for breach of fiduciary duty), that, for any reason, are not 

capable of being transferred to the Claimant Trust. For the avoidance of doubt, “Reorganized 

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000287

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Debtor Assets” includes any partnership interests or shares of Managed Funds held by the Debtor 

but does not include the underlying portfolio assets held by the Managed Funds. 

116. “Reorganized Limited Partnership Agreement” means that certain Fifth 

Amended and Restated Agreement of Limited Partnership of Highland Capital Management, 

L.P., by and among the Claimant Trust, as limited partner, and New GP LLC, as general partner, 

Filed with the Plan Supplement.

117. “Restructuring” means the restructuring of the Debtor, the principal terms 

of which are set forth in this Plan and the Disclosure Statement. 

118. “Retained Employee Claim” means any Claim filed by a current employee 

of the Debtor who will be employed by the Reorganized Debtor upon the Effective Date. 

119. “Schedules” means the schedules of Assets and liabilities, statements of 

financial affairs, lists of Holders of Claims and Equity Interests and all amendments or 

supplements thereto Filed by the Debtor with the Bankruptcy Court [D.I. 247]. 

120. “Secured” means, when referring to a Claim: (a) secured by a Lien on 

property in which the Debtor’s Estate has an interest, which Lien is valid, perfected, and 

enforceable pursuant to applicable law or by reason of a Bankruptcy Court order, or that is 

subject to setoff pursuant to section 553 of the Bankruptcy Code, to the extent of the value of the 

creditor’s interest in the interest of the Debtor’s Estate in such property or to the extent of the 

amount subject to setoff, as applicable, as determined pursuant to section 506(a) of the 

Bankruptcy Code or (b) Allowed pursuant to the Plan as a Secured Claim. 

121. “Security” or “security” means any security as such term is defined in 

section 101(49) of the Bankruptcy Code. 

122. “Senior Employees” means the senior employees of the Debtor Filed in the 

Plan Supplement. 

123. “Senior Employee Stipulation” means the agreements filed in the Plan 

Supplement between each Senior Employee and the Debtor. 

124. “Stamp or Similar Tax” means any stamp tax, recording tax, personal 

property tax, conveyance fee, intangibles or similar tax, real estate transfer tax, sales tax, use tax,

transaction privilege tax (including, without limitation, such taxes on prime contracting and 

owner-builder sales), privilege taxes (including, without limitation, privilege taxes on 

construction contracting with regard to speculative builders and owner builders), and other 

similar taxes imposed or assessed by any Governmental Unit.

125. “Statutory Fees” means fees payable pursuant to 28 U.S.C. § 1930. 

126. “Strand” means Strand Advisors, Inc., the Debtor’s general partner.

127. “Sub-Servicer” means a third-party selected by the Claimant Trustee to 

service or sub-service the Reorganized Debtor Assets. 

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000288

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128. “Sub-Servicer Agreement” means the agreement that may be entered into 

providing for the servicing of the Reorganized Debtor Assets by the Sub-Servicer.

129. “Subordinated Claim” means any Claim that is subordinated to the 

Convenience Claims and General Unsecured Claims pursuant to 11 U.S.C. § 510 or order 

entered by the Bankruptcy Court. 

130. “Subordinated Claimant Trust Interests” means the Claimant Trust 

Interests to be distributed to Holders of Allowed Subordinated Claims under the Plan, which 

such interests shall be subordinated in right and priority to the Claimant Trust Interests 

distributed to Holders of Allowed General Unsecured Claims as provided in the Claimant Trust 

Agreement. 

131. “Trust Distribution” means the transfer of Cash or other property by the 

Claimant Trustee to the Claimant Trust Beneficiaries.

132. “Trustees” means, collectively, the Claimant Trustee and Litigation 

Trustee. 

133. “UBS” means, collectively, UBS Securities LLC and UBS AG London 

Branch.

134. “Unexpired Lease” means a lease to which the Debtor is a party that is 

subject to assumption or rejection under section 365 of the Bankruptcy Code. 

135. “Unimpaired” means, with respect to a Class of Claims or Equity Interests 

that is not impaired within the meaning of section 1124 of the Bankruptcy Code. 

136. “Voting Deadline” means the date and time by which all Ballots to accept 

or reject the Plan must be received in order to be counted under the under the Order of the 

Bankruptcy Court approving the Disclosure Statement as containing adequate information 

pursuant to section 1125(a) of the Bankruptcy Code and authorizing the Debtor to solicit 

acceptances of the Plan. 

137. “Voting Record Date” means November 23, 2020. 

ARTICLE II.

ADMINISTRATIVE EXPENSES AND PRIORITY TAX CLAIMS

A. Administrative Expense Claims

On the later of the Effective Date or the date on which an Administrative Expense Claim 

becomes an Allowed Administrative Expense Claim, or, in each such case, as soon as practicable 

thereafter, each Holder of an Allowed Administrative Expense Claim (other than Professional 

Fee Claims) will receive, in full satisfaction, settlement, discharge and release of, and in 

exchange for, such Allowed Administrative Expense Claim either (i) payment in full in 

Available Cash for the unpaid portion of such Allowed Administrative Expense Claim; or 

(ii) such other less favorable treatment as agreed to in writing by the Debtor or the Reorganized 

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000289

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Debtor, as applicable, and such Holder; provided, however, that Administrative Expense Claims 

incurred by the Debtor in the ordinary course of business may be paid in the ordinary course of 

business in the discretion of the Debtor in accordance with such applicable terms and conditions 

relating thereto without further notice to or order of the Bankruptcy Court. All statutory fees 

payable under 28 U.S.C. § 1930(a) shall be paid as such fees become due. 

If an Administrative Expense Claim (other than a Professional Fee Claim) is not paid by 

the Debtor in the ordinary course, the Holder of such Administrative Expense Claim must File, 

on or before the applicable Administrative Expense Claims Bar Date, and serve on the Debtor or 

Reorganized Debtor, as applicable, and such other Entities who are designated by the 

Bankruptcy Rules, the Confirmation Order or other order of the Bankruptcy Court, an 

application for allowance and payment of such Administrative Expense Claim. 

Objections to any Administrative Expense Claim (other than a Professional Fee Claim) 

must be Filed and served on the Debtor or the Reorganized Debtor, as applicable, and the party 

asserting such Administrative Expense Claim by the Administrative Expense Claims Objection 

Deadline. 

B. Professional Fee Claims

Professionals or other Entities asserting a Professional Fee Claim for services rendered 

through the Effective Date must submit fee applications under sections 327, 328, 329,330, 331, 

503(b) or 1103 of the Bankruptcy Code and, upon entry of an order of the Bankruptcy Court 

granting such fee applications, such Professional Fee Claim shall promptly be paid in Cash in 

full to the extent provided in such order. 

Professionals or other Entities asserting a Professional Fee Claim for services rendered on 

or prior to the Effective Date must File, on or before the Professional Fee Claims Bar Date, and 

serve on the Debtor or Reorganized Debtor, as applicable, and such other Entities who are 

designated as requiring such notice by the Bankruptcy Rules, the Confirmation Order or other 

order of the Bankruptcy Court, an application for final allowance of such Professional Fee 

Claim. 

Objections to any Professional Fee Claim must be Filed and served on the Debtor or 

Reorganized Debtor, as applicable, and the party asserting the Professional Fee Claim by the 

Professional Fee Claim Objection Deadline. Each Holder of an Allowed Professional Fee Claim 

will be paid by the Debtor or the Claimant Trust, as applicable, in Cash within ten (10) Business 

Days of entry of the order approving such Allowed Professional Fee Claim. 

On the Effective Date, the Claimant Trustee shall establish the Professional Fee Reserve. 

The Professional Fee Reserve shall vest in the Claimant Trust and shall be maintained by the 

Claimant Trustee in accordance with the Plan and Claimant Trust Agreement. The Claimant 

Trust shall fund the Professional Fee Reserve on the Effective Date in an estimated amount 

determined by the Debtor in good faith prior to the Confirmation Date and that approximates the 

total projected amount of unpaid Professional Fee Claims on the Effective Date. Following the 

payment of all Allowed Professional Fee Claims, any excess funds in the Professional Fee 

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Reserve shall be released to the Claimant Trust to be used for other purposes consistent with the 

Plan and the Claimant Trust Agreement.

C. Priority Tax Claims 

On or as soon as reasonably practicable after the later of (i) the Initial Distribution Date if 

such Priority Tax Claim is an Allowed Priority Tax Claim as of the Effective Date or (ii) the date 

on which such Priority Tax Claim becomes an Allowed Priority Tax Claim, each Holder of an 

Allowed Priority Tax Claim will receive in full satisfaction, settlement, discharge and release of, 

and in exchange for, such Allowed Priority Tax Claim, at the election of the Debtor: (a) Cash in 

an amount equal to the amount of such Allowed Priority Tax Claim, (b) payment of such 

Allowed Priority Tax Claim in accordance with section 1129(a)(9)(C) of the Bankruptcy Code; 

or (c) such other less favorable treatment as agreed to in writing by the Debtor and such Holder. 

Payment of statutory fees due pursuant to 28 U.S.C. § 1930(a)(6) will be made at all appropriate 

times until the entry of a final decree; provided, however, that the Debtor may prepay any or all 

such Claims at any time, without premium or penalty. 

ARTICLE III.

CLASSIFICATION AND TREATMENT OF 

CLASSIFIED CLAIMS AND EQUITY INTERESTS

A. Summary

All Claims and Equity Interests, except Administrative Expense Claims and Priority Tax 

Claims, are classified in the Classes set forth below. In accordance with section 1123(a)(1) of 

the Bankruptcy Code, Administrative Expense Claims, and Priority Tax Claims have not been 

classified.

The categories of Claims and Equity Interests listed below classify Claims and Equity 

Interests for all purposes including, without limitation, confirmation and distribution pursuant to 

the Plan and pursuant to sections 1122 and 1123(a)(1) of the Bankruptcy Code. The Plan deems 

a Claim or Equity Interest to be classified in a particular Class only to the extent that the Claim 

or Equity Interest qualifies within the description of that Class and will be deemed classified in a 

different Class to the extent that any remainder of such Claim or Equity Interest qualifies within 

the description of such different Class. A Claim or Equity Interest is in a particular Class only to 

the extent that any such Claim or Equity Interest is Allowed in that Class and has not been paid, 

released or otherwise settled (in each case, by the Debtor or any other Entity) prior to the 

Effective Date.

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000291

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B. Summary of Classification and Treatment of Classified Claims and Equity Interests

Class Claim Status Voting Rights 

1 Jefferies Secured Claim Unimpaired Deemed to Accept

2 Frontier Secured Claim Impaired Entitled to Vote

3 Other Secured Claims Unimpaired Deemed to Accept

4 Priority Non-Tax Claim Unimpaired Deemed to Accept

5 Retained Employee Claim Unimpaired Deemed to Accept

6 PTO Claims Unimpaired Deemed to Accept

7 Convenience Claims Impaired Entitled to Vote

8 General Unsecured Claims Impaired Entitled to Vote

9 Subordinated Claims Impaired Entitled to Vote

10 Class B/C Limited Partnership Interests Impaired Entitled to Vote

11 Class A Limited Partnership Interests Impaired Entitled to Vote

C. Elimination of Vacant Classes

Any Class that, as of the commencement of the Confirmation Hearing, does not have at

least one Holder of a Claim or Equity Interest that is Allowed in an amount greater than zero for 

voting purposes shall be considered vacant, deemed eliminated from the Plan for purposes of 

voting to accept or reject the Plan, and disregarded for purposes of determining whether the Plan 

satisfies section 1129(a)(8) of the Bankruptcy Code with respect to such Class. 

D. Impaired/Voting Classes 

Claims and Equity Interests in Class 2 and Class 7 through Class 11 are Impaired by the 

Plan, and only the Holders of Claims or Equity Interests in those Classes are entitled to vote to 

accept or reject the Plan.

E. Unimpaired/Non-Voting Classes 

Claims in Class 1 and Class 3 through Class 6 are Unimpaired by the Plan, and such 

Holders are deemed to have accepted the Plan and are therefore not entitled to vote on the Plan. 

F. Impaired/Non-Voting Classes

There are no Classes under the Plan that will not receive or retain any property and no 

Classes are deemed to reject the Plan. 

G. Cramdown

If any Class of Claims or Equity Interests is deemed to reject this Plan or does not vote to 

accept this Plan, the Debtor may (i) seek confirmation of this Plan under section 1129(b) of the 

Bankruptcy Code or (ii) amend or modify this Plan in accordance with the terms hereof and the 

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000292

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Bankruptcy Code. If a controversy arises as to whether any Claims or Equity Interests, or any 

class of Claims or Equity Interests, are Impaired, the Bankruptcy Court shall, after notice and a 

hearing, determine such controversy on or before the Confirmation Date. 

H. Classification and Treatment of Claims and Equity Interests

1. Class 1 – Jefferies Secured Claim

x Classification: Class 1 consists of the Jefferies Secured Claim.

x Treatment: On or as soon as reasonably practicable after the Effective 

Date, each Holder of an Allowed Class 1 Claim will receive in full 

satisfaction, settlement, discharge and release of, and in exchange for, 

such Allowed Class 1 Claim, at the election of the Debtor: (A) Cash equal 

to the amount of such Allowed Class 1 Claim; (B) such other less 

favorable treatment as to which the Debtor and the Holder of such 

Allowed Class 1 Claim will have agreed upon in writing; or (C) such other 

treatment rendering such Claim Unimpaired. Each Holder of an Allowed 

Class 1 Claim will retain the Liens securing its Allowed Class 1 Claim as 

of the Effective Date until full and final payment of such Allowed Class 1 

Claim is made as provided herein. 

x Impairment and Voting: Class 1 is Unimpaired, and the Holders of 

Class 1 Claims are conclusively deemed to have accepted this Plan 

pursuant to section 1126(f) of the Bankruptcy Code. Therefore, the 

Holders of Class 1 Claims are not entitled to vote to accept or reject this 

Plan and will not be solicited.

2. Class 2 – Frontier Secured Claim 

x Classification: Class 2 consists of the Frontier Secured Claim. 

x Treatment: On or as soon as reasonably practicable after the Effective 

Date, each Holder of an Allowed Class 2 Claim will receive in full 

satisfaction, settlement, discharge and release of, and in exchange for, 

such Allowed Class 2 Claim: (A) Cash in an amount equal to all accrued 

but unpaid interest on the Frontier Claim through and including the 

Effective Date and (B) the New Frontier Note. The Holder of an Allowed 

Class 2 Claim will retain the Liens securing its Allowed Class 2 Claim as 

of the Effective Date until full and final payment of such Allowed Class 2 

Claim is made as provided herein. 

x Impairment and Voting: Class 2 is Impaired, and the Holders of Class 2

Claims are entitled to vote to accept or reject this Plan.

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000293

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3. Class 3 – Other Secured Claims 

x Classification: Class 3 consists of the Other Secured Claims. 

x Allowance and Treatment: On or as soon as reasonably practicable after 

the later of (i) the Initial Distribution Date if such Class 3 Claim is 

Allowed on the Effective Date or (ii) the date on which such Class 3 

Claim becomes an Allowed Class 3 Claim, each Holder of an Allowed 

Class 3 Claim will receive in full satisfaction, settlement, discharge and 

release of, and in exchange for, its Allowed Claim 3 Claim, at the option 

of the Debtor, or following the Effective Date, the Reorganized Debtor or 

Claimant Trustee, as applicable, (i) Cash equal to such Allowed Other 

Secured Claim, (ii) the collateral securing its Allowed Other Secured 

Claim, plus postpetition interest to the extent required under Bankruptcy 

Code Section 506(b), or (iii) such other treatment rendering such Claim 

Unimpaired. 

x Impairment and Voting: Class 3 is Unimpaired, and the Holders of Class 

3 Claims are conclusively deemed to have accepted this Plan pursuant to 

section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 3 

Claims are not entitled to vote to accept or reject this Plan and will not be 

solicited.

4. Class 4 – Priority Non-Tax Claims 

x Classification: Class 4 consists of the Priority Non-Tax Claims. 

x Allowance and Treatment: On or as soon as reasonably practicable after 

the later of (i) the Initial Distribution Date if such Class 4 Claim is 

Allowed on the Effective Date or (ii) the date on which such Class 4 

Claim becomes an Allowed Class 4 Claim, each Holder of an Allowed 

Class 4 Claim will receive in full satisfaction, settlement, discharge and 

release of, and in exchange for, its Allowed Claim 4 Claim Cash equal to 

the amount of such Allowed Class 4 Claim. 

x Impairment and Voting: Class 4 is Unimpaired, and the Holders of Class 

4 Claims are conclusively deemed to have accepted this Plan pursuant to 

section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 4 

Claims are not entitled to vote to accept or reject this Plan and will not be 

solicited.

5. Class 5 – Retained Employee Claims 

x Classification: Class 5 consists of the Retained Employee Claims. 

x Allowance and Treatment: On or as soon as reasonably practicable after 

the Effective Date, each Allowed Class 5 Claim will be Reinstated. 

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x Impairment and Voting: Class 5 is Unimpaired, and the Holders of Class 

5 Claims are conclusively deemed to have accepted this Plan pursuant to 

section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 5 

Claims are not entitled to vote to accept or reject this Plan and will not be 

solicited.

6. Class 6 – PTO Claims

x Classification: Class 6 consists of the PTO Claims.

x Allowance and Treatment: On or as soon as reasonably practicable after 

the later of (i) the Initial Distribution Date if such Class 6 Claim is 

Allowed on the Effective Date or (ii) the date on which such Class 6 

Claim becomes an Allowed Class 6 Claim, each Holder of an Allowed 

Class 6 Claim will receive in full satisfaction, settlement, discharge and 

release of, and in exchange for, its Allowed Claim 6 Claim Cash equal to 

the amount of such Allowed Class 6 Claim. 

x Impairment and Voting: Class 6 is Unimpaired, and the Holders of Class 

6 Claims are conclusively deemed to have accepted this Plan pursuant to 

section 1126(f) of the Bankruptcy Code. Therefore, the Holders of Class 6 

Claims are not entitled to vote to accept or reject this Plan and will not be 

solicited.

7. Class 7 – Convenience Claims 

x Classification: Class 7 consists of the Convenience Claims. 

x Allowance and Treatment: On or as soon as reasonably practicable after 

the later of (i) the Initial Distribution Date if such Class 7 Claim is 

Allowed on the Effective Date or (ii) the date on which such Class 7 

Claim becomes an Allowed Class 7 Claim, each Holder of an Allowed 

Class 7 Claim will receive in full satisfaction, settlement, discharge and 

release of, and in exchange for, its Allowed Class 7 Claim (1) the 

treatment provided to Allowed Holders of Class 8 General Unsecured 

Claims if the Holder of such Class 7 Claim makes the GUC Election or (2) 

an amount in Cash equal to the lesser of (a) 85% of the Allowed amount 

of such Holder’s Class 7 Claim or (b) such Holder’s Pro Rata share of the 

Convenience Claims Cash Pool. 

x Impairment and Voting: Class 7 is Impaired, and the Holders of Class 7 

Claims are entitled to vote to accept or reject this Plan.

8. Class 8 – General Unsecured Claims 

x Classification: Class 8 consists of the General Unsecured Claims.

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x Treatment: On or as soon as reasonably practicable after the Effective 

Date, each Holder of an Allowed Class 8 Claim, in full satisfaction, 

settlement, discharge and release of, and in exchange for, such Claim shall 

receive (i) its Pro Rata share of the Claimant Trust Interests, (ii) such other 

less favorable treatment as to which such Holder and the Claimant Trustee 

shall have agreed upon in writing, or (iii) the treatment provided to 

Allowed Holders of Class 7 Convenience Claims if the Holder of such 

Class 8 General Unsecured Claim is eligible and makes a valid

Convenience Class Election. 

Notwithstanding anything to the contrary herein, after the Effective Date 

and subject to the other provisions of this Plan, the Debtor, the 

Reorganized Debtor, and the Claimant Trust, as applicable, will have and 

will retain any and all rights and defenses under bankruptcy or 

nonbankruptcy law that the Debtor had with respect to any General 

Unsecured Claim, except with respect to any General Unsecured Claim 

Allowed by Final Order of the Bankruptcy Court. 

x Impairment and Voting: Class 8 is Impaired, and the Holders of Class 8 

Claims are entitled to vote to accept or reject this Plan.

9. Class 9 – Subordinated Claims 

x Classification: Class 9 consists of the Subordinated Claims. 

Treatment: On the Effective Date, Holders of Subordinated Claims shall 

receive either (i) their Pro Rata share of the Subordinated Claimant Trust 

Interests or, (ii) such other less favorable treatment as to which such 

Holder and the Claimant Trustee may agree upon in writing. 

Notwithstanding anything to the contrary herein, after the Effective Date 

and subject to the other provisions of this Plan, the Debtor, the 

Reorganized Debtor, and the Claimant Trust, as applicable, will have and 

will retain any and all rights and defenses under bankruptcy or 

nonbankruptcy law that the Debtor had with respect to any Subordinated 

Claim, except with respect to any Subordinated Claim Allowed by Final 

Order of the Bankruptcy Court. 

x Impairment and Voting: Class 9 is Impaired, and the Holders of Class 9 

Claims are entitled to vote to accept or reject this Plan.

10. Class 10 – Class B/C Limited Partnership Interests 

x Classification: Class 10 consists of the Class B/C Limited Partnership 

Interests.

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x Treatment: On or as soon as reasonably practicable after the Effective 

Date, each Holder of an Allowed Class 10 Claim, in full satisfaction, 

settlement, discharge and release of, and in exchange for, such Claim shall 

receive (i) its Pro Rata share of the Contingent Claimant Trust Interests or 

(ii) such other less favorable treatment as to which such Holder and the 

Claimant Trustee shall have agreed upon in writing. 

Notwithstanding anything to the contrary herein, after the Effective Date 

and subject to the other provisions of this Plan, the Debtor, the 

Reorganized Debtor, and the Claimant Trust, as applicable, will have and 

will retain any and all rights and defenses under bankruptcy or 

nonbankruptcy law that the Debtor had with respect to any Class B/C 

Limited Partnership Interest Claim, except with respect to any Class B/C 

Limited Partnership Interest Claim Allowed by Final Order of the 

Bankruptcy Court. 

x Impairment and Voting: Class 10 is Impaired, and the Holders of Class 10 

Claims are entitled to vote to accept or reject this Plan.

11. Class 11 – Class A Limited Partnership Interests 

x Classification: Class 11 consists of the Class A Limited Partnership 

Interests.

x Treatment: On or as soon as reasonably practicable after the Effective 

Date, each Holder of an Allowed Class 11 Claim, in full satisfaction, 

settlement, discharge and release of, and in exchange for, such Claim shall 

receive (i) its Pro Rata share of the Contingent Claimant Trust Interests or 

(ii) such other less favorable treatment as to which such Holder and the 

Claimant Trustee shall have agreed upon in writing. 

Notwithstanding anything to the contrary herein, after the Effective Date 

and subject to the other provisions of this Plan, the Debtor, the 

Reorganized Debtor, and the Claimant Trust, as applicable, will have and 

will retain any and all rights and defenses under bankruptcy or 

nonbankruptcy law that the Debtor had with respect to any Class A 

Limited Partnership Interest, except with respect to any Class A Limited 

Partnership Interest Allowed by Final Order of the Bankruptcy Court. 

x Impairment and Voting: Class 11 is Impaired, and the Holders of Class 11 

Claims are entitled to vote to accept or reject this Plan.

I. Special Provision Governing Unimpaired Claims 

Except as otherwise provided in the Plan, nothing under the Plan will affect the Debtor’s 

rights in respect of any Unimpaired Claims, including, without limitation, all rights in respect of 

legal and equitable defenses to or setoffs or recoupments against any such Unimpaired Claims. 

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000297

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J. Subordinated Claims

The allowance, classification, and treatment of all Claims under the Plan shall take into 

account and conform to the contractual, legal, and equitable subordination rights relating thereto, 

whether arising under general principles of equitable subordination, section 510(b) of the 

Bankruptcy Code, or otherwise. Under section 510 of the Bankruptcy Code, upon written notice

and hearing, the Debtor the Reorganized Debtor, and the Claimant Trustee reserve the right to 

seek entry of an order by the Bankruptcy Court to re-classify or to subordinate any Claim in 

accordance with any contractual, legal, or equitable subordination relating thereto, and the 

treatment afforded any Claim under the Plan that becomes a subordinated Claim at any time shall 

be modified to reflect such subordination. 

ARTICLE IV.

MEANS FOR IMPLEMENTATION OF THIS PLAN

A. Summary

As discussed in the Disclosure Statement, the Plan will be implemented through (i) the 

Claimant Trust, (ii) the Litigation Sub-Trust, and (iii) the Reorganized Debtor. 

On the Effective Date, all Class A Limited Partnership Interests, including the Class A 

Limited Partnership Interests held by Strand, as general partner, and Class B/C Limited 

Partnerships in the Debtor will be cancelled, and new Class A Limited Partnership Interests in 

the Reorganized Debtor will be issued to the Claimant Trust and New GP LLC – a newlychartered limited liability company wholly-owned by the Claimant Trust. The Claimant Trust, 

as limited partner, will ratify New GP LLC’s appointment as general partner of the Reorganized 

Debtor, and on and following the Effective Date, the Claimant Trust will be the Reorganized 

Debtor’s limited partner and New GP LLC will be its general partner. The Claimant Trust, as 

limited partner, and New GP LLC, as general partner, will execute the Reorganized Limited 

Partnership Agreement, which will amend and restate, in all respects, the Debtor’s current 

Limited Partnership Agreement. Following the Effective Date, the Reorganized Debtor will be 

managed consistent with the terms of the Reorganized Limited Partnership Agreement by New 

GP LLC. The sole managing member of New GP LLC will be the Claimant Trust, and the 

Claimant Trustee will be the sole officer of New GP LLC on the Effective Date. 

Following the Effective Date, the Claimant Trust will administer the Claimant Trust 

Assets pursuant to this Plan and the Claimant Trust Agreement, and the Litigation Trustee will 

pursue, if applicable, the Estate Claims pursuant to the terms of the Litigation Sub-Trust 

Agreement and the Plan. The Reorganized Debtor will administer the Reorganized Debtor 

Assets and, if needed, with the utilization of a Sub-Servicer, which administration will include, 

among other things, managing the wind down of the Managed Funds. 

Although the Reorganized Debtor will manage the wind down of the Managed Funds, it 

is currently anticipated that neither the Reorganized Debtor nor the Claimant Trust will assume 

or assume and assign the contracts between the Debtor and certain Related Entities pursuant to 

which the Debtor provides shared services and sub-advisory services to those Related Entities. 

The Debtor believes that the continued provision of the services under such contracts will not be 

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000298

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cost effective. 

The Reorganized Debtor will distribute all proceeds from the wind down to the Claimant 

Trust, as its limited partner, and New GP LLC, as its general partner, in each case in accordance 

with the Reorganized Limited Partnership Agreement. Such proceeds, along with the proceeds 

of the Claimant Trust Assets, will ultimately be distributed to the Claimant Trust Beneficiaries as 

set forth in this Plan and the Claimant Trust Agreement. 

B. The Claimant Trust2

1. Creation and Governance of the Claimant Trust and Litigation Sub-Trust. 

On or prior to the Effective Date, the Debtor and the Claimant Trustee shall execute the 

Claimant Trust Agreement and shall take all steps necessary to establish the Claimant Trust and 

the Litigation Sub-Trust in accordance with the Plan in each case for the benefit of the Claimant 

Trust Beneficiaries. Additionally, on or prior to the Effective Date, the Debtor shall irrevocably 

transfer and shall be deemed to have irrevocably transferred to the Claimant Trust all of its 

rights, title, and interest in and to all of the Claimant Trust Assets, and in accordance with section 

1141 of the Bankruptcy Code, the Claimant Trust Assets shall automatically vest in the Claimant 

Trust free and clear of all Claims, Liens, encumbrances, or interests subject only to the Claimant 

Trust Interests and the Claimant Trust Expenses, as provided for in the Claimant Trust 

Agreement, and such transfer shall be exempt from any stamp, real estate transfer, mortgage 

from any stamp, transfer, reporting, sales, use, or other similar tax. 

The Claimant Trustee shall be the exclusive trustee of the Claimant Trust Assets, 

excluding the Estate Claims and the Litigation Trustee shall be the exclusive trustee with respect 

to the Estate Claims in each case for purposes of 31 U.S.C. § 3713(b) and 26 U.S.C. § 

6012(b)(3), as well as the representative of the Estate appointed pursuant to section 

1123(b)(3)(B) of the Bankruptcy Code with respect to the Claimant Trust Assets. The Claimant 

Trustee shall also be responsible for resolving all Claims and Equity Interests in Class 8 through 

Class 11, under the supervision of the Claimant Trust Oversight Committee. 

On the Effective Date, the Claimant Trustee and Litigation Trustee shall execute the 

Litigation Sub-Trust Agreement and shall take all steps necessary to establish the Litigation SubTrust. Upon the creation of the Litigation Sub-Trust, the Claimant Trust shall irrevocably 

transfer and assign to the Litigation Sub-Trust the Estate Claims. The Claimant Trust shall be 

governed by the Claimant Trust Agreement and administered by the Claimant Trustee. The 

powers, rights, and responsibilities of the Claimant Trustee shall be specified in the Claimant 

Trust Agreement and shall include the authority and responsibility to, among other things, take 

the actions set forth in this ARTICLE IV, subject to any required reporting to the Claimant Trust 

Oversight Committee as may be set forth in the Claimant Trust Agreement. The Claimant Trust 

shall hold and distribute the Claimant Trust Assets (including the proceeds from the Estate 

Claims, if any) in accordance with the provisions of the Plan and the Claimant Trust Agreement;

provided that the Claimant Trust Oversight Committee may direct the Claimant Trust to reserve 

2 In the event of a conflict between the terms of this summary and the terms of the Claimant Trust Agreement and 

the Litigation Sub-Trust Agreement, the terms of the Claimant Trust Agreement or the Litigation Sub-Trust 

Agreement, as applicable, shall control. 

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Cash from distributions as necessary to fund the Claimant Trust and Litigation Sub-Trust. Other 

rights and duties of the Claimant Trustee and the Claimant Trust Beneficiaries shall be as set 

forth in the Claimant Trust Agreement. After the Effective Date, neither the Debtor nor the 

Reorganized Debtor shall have any interest in the Claimant Trust Assets. 

The Litigation Sub-Trust shall be governed by the Litigation Sub-Trust Agreement and 

administered by the Litigation Trustee. The powers, rights, and responsibilities of the Litigation 

Trustee shall be specified in the Litigation Sub-Trust Agreement and shall include the authority 

and responsibility to, among other things, take the actions set forth in this ARTICLE IV, subject 

to any required reporting as may be set forth in the Litigation Sub-Trust Agreement. The

Litigation Sub-Trust shall investigate, prosecute, settle, or otherwise resolve the Estate Claims in 

accordance with the provisions of the Plan and the Litigation Sub-Trust Agreement and shall 

distribute the proceeds therefrom to the Claimant Trust for distribution. Other rights and duties 

of the Litigation Trustee shall be as set forth in the Litigation Sub-Trust Agreement. 

2. Claimant Trust Oversight Committee

The Claimant Trust, the Claimant Trustee, the management and monetization of the 

Claimant Trust Assets, and the management of the Reorganized Debtor (through the Claimant 

Trust’s role as managing member of New GP LLC) and the Litigation Sub-Trust will be 

overseen by the Claimant Trust Oversight Committee, subject to the terms of the Claimant Trust 

Agreement and the Litigation Sub-Trust Agreement, as applicable. 

The Claimant Trust Oversight Committee will initially consist of five members. Four of 

the five members will be representatives of the members of the Committee: (i) the Redeemer 

Committee of Highland Crusader Fund, (ii) UBS, (iii) Acis, and (iv) Meta-e Discovery. The 

fifth member will be an independent, natural Person chosen by the Committee and reasonably 

acceptable to the Debtor. The members of the Claimant Trust Oversight Committee may be 

replaced as set forth in the Claimant Trust Agreement. The identity of the members of the 

Claimant Trust Oversight Committee will be disclosed in the Plan Supplement. 

As set forth in the Claimant Trust Agreement, in no event will any member of the 

Claimant Trust Oversight Committee with a Claim against the Estate be entitled to vote, opine, 

or otherwise be involved in any matters related to such member’s Claim.

The independent member(s) of the Claimant Trust Oversight Committee may be entitled 

to compensation for their services as set forth in the Claimant Trust Agreement. Any member of 

the Claimant Trust Oversight Committee may be removed, and successor chosen, in the manner 

set forth in the Claimant Trust Agreement. 

3. Purpose of the Claimant Trust. 

The Claimant Trust shall be established for the purpose of (i) managing and monetizing 

the Claimant Trust Assets, subject to the terms of the Claimant Trust Agreement and the 

oversight of the Claimant Trust Oversight Committee, (ii) serving as the limited partner of, and 

holding the limited partnership interests in, the Reorganized Debtor, (iii) serving as the sole 

member and manager of New GP LLC, the Reorganized Debtor’s general partner, (iv) in its 

capacity as the sole member and manager of New GP LLC, overseeing the management and 

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000300

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monetization of the Reorganized Debtor Assets pursuant to the terms of the Reorganized Limited 

Partnership Agreement; and (v) administering the Disputed Claims Reserve and serving as 

Distribution Agent with respect to Disputed Claims in Class 7 or Class 8. 

In its management of the Claimant Trust Assets, the Claimant Trust will also reconcile 

and object to the General Unsecured Claims, Subordinated Claims, Class B/C Limited 

Partnership Interests, and Class A Limited Partnership Interests, as provided for in this Plan and 

the Claimant Trust Agreement, and make Trust Distributions to the Claimant Trust Beneficiaries 

in accordance with Treasury Regulation section 301.7701-4(d), with no objective to continue or 

engage in the conduct of a trade or business. 

The purpose of the Reorganized Debtor is discussed at greater length in ARTICLE IV.C. 

4. Purpose of the Litigation Sub-Trust. 

The Litigation Sub-Trust shall be established for the purpose of investigating, 

prosecuting, settling, or otherwise resolving the Estate Claims. Any proceeds therefrom shall be 

distributed by the Litigation Sub-Trust to the Claimant Trust for distribution to the Claimant 

Trust Beneficiaries pursuant to the terms of the Claimant Trust Agreement. 

5. Claimant Trust Agreement and Litigation Sub-Trust Agreement. 

The Claimant Trust Agreement generally will provide for, among other things: 

(i) the payment of the Claimant Trust Expenses; 

(ii) the payment of other reasonable expenses of the Claimant Trust; 

(iii) the retention of employees, counsel, accountants, financial advisors, or other 

professionals and the payment of their reasonable compensation; 

(iv) the investment of Cash by the Claimant Trustee within certain limitations, 

including those specified in the Plan; 

(v) the orderly monetization of the Claimant Trust Assets;

(vi) litigation of any Causes of Action, which may include the prosecution, 

settlement, abandonment, or dismissal of any such Causes of Action, subject to reporting and 

oversight by the Claimant Trust Oversight Committee; 

(vii) the resolution of Claims and Equity Interests in Class 8 through Class 11,

subject to reporting and oversight by the Claimant Trust Oversight Committee; 

(viii) the administration of the Disputed Claims Reserve and distributions to be 

made therefrom; and 

(ix) the management of the Reorganized Debtor, including the utilization of a SubServicer, with the Claimant Trust serving as the managing member of New GP LLC. 

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000301

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Except as otherwise ordered by the Bankruptcy Court, the Claimant Trust Expenses shall

be paid from the Claimant Trust Assets in accordance with the Plan and Claimant Trust 

Agreement. The Claimant Trustee may establish a reserve for the payment of Claimant Trust 

Expense (including, without limitation, any reserve for potential indemnification claims as 

authorized and provided under the Claimant Trust Agreement), and shall periodically replenish 

such reserve, as necessary. 

In furtherance of, and consistent with the purpose of, the Claimant Trust and the Plan, the 

Trustees, for the benefit of the Claimant Trust, shall, subject to reporting and oversight by the 

Claimant Trust Oversight Committee as set forth in the Claimant Trust Agreement: (i) hold the 

Claimant Trust Assets for the benefit of the Claimant Trust Beneficiaries, (ii) make Distributions 

to the Claimant Trust Beneficiaries as provided herein and in the Claimant Trust Agreement, and 

(iii) have the sole power and authority to prosecute and resolve any Causes of Action and 

objections to Claims and Equity Interests (other than those assigned to the Litigation Sub-Trust),

without approval of the Bankruptcy Court. Except as otherwise provided in the Claimant Trust 

Agreement, the Claimant Trustee shall be responsible for all decisions and duties with respect to 

the Claimant Trust and the Claimant Trust Assets; provided, however, that the prosecution and 

resolution of any Estate Claims included in the Claimant Trust Assets shall be the responsibility 

of the Litigation Trustee. The Litigation Sub-Trust Agreement generally will provide for, among 

other things: 

(i) the payment of other reasonable expenses of the Litigation Sub-Trust;

(ii) the retention of employees, counsel, accountants, financial advisors, or other 

professionals and the payment of their reasonable compensation; and 

(iii) the investigation and prosecution of Estate Claims, which may include the 

prosecution, settlement, abandonment, or dismissal of any such Estate Claims, subject to 

reporting and oversight as set forth in the Litigation Sub-Trust Agreement.

The Trustees, on behalf of the Claimant Trust and Litigation Sub-Trust, as applicable, 

may each employ, without further order of the Bankruptcy Court, employees and other 

professionals (including those previously retained by the Debtor and the Committee) to assist in 

carrying out the Trustees’ duties hereunder and may compensate and reimburse the reasonable 

expenses of these professionals without further Order of the Bankruptcy Court from the Claimant 

Trust Assets in accordance with the Plan and the Claimant Trust Agreement. 

The Claimant Trust Agreement and Litigation Sub-Trust Agreement may include 

reasonable and customary provisions that allow for indemnification by the Claimant Trust in 

favor of the Claimant Trustee, Litigation Trustee, and the Claimant Trust Oversight Committee. 

Any such indemnification shall be the sole responsibility of the Claimant Trust and payable 

solely from the Claimant Trust Assets.

6. Compensation and Duties of Trustees. 

The salient terms of each Trustee’s employment, including such Trustee’s duties and 

compensation shall be set forth in the Claimant Trust Agreement and the Litigation Sub-Trust 

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Agreement, as appropriate. The Trustees shall each be entitled to reasonable compensation in an 

amount consistent with that of similar functionaries in similar types of bankruptcy cases.

7. Cooperation of Debtor and Reorganized Debtor. 

To effectively investigate, prosecute, compromise and/or settle the Claims and/or Causes 

of Action that constitute Claimant Trust Assets (including Estate Claims), the Claimant Trustee, 

Litigation Trustee, and each of their professionals may require reasonable access to the Debtor’s 

and Reorganized Debtor’s documents, information, and work product relating to the Claimant 

Trust Assets. Accordingly, the Debtor and the Reorganized Debtor, as applicable, shall 

reasonably cooperate with the Claimant Trustee and Litigation Trustee, as applicable, in their 

prosecution of Causes of Action and in providing the Claimant Trustee and Litigation Trustee 

with copies of documents and information in the Debtor’s possession, custody, or control on the 

Effective Date that either Trustee indicates relates to the Estate Claims or other Causes of 

Action. 

The Debtor and Reorganized Debtor shall preserve all records, documents or work 

product (including all electronic records, documents, or work product) related to the Claims and 

Causes of Action, including Estate Claims, until the earlier of (a) the dissolution of the 

Reorganized Debtor or (b) termination of the Claimant Trust and Litigation Sub-Trust.

8. United States Federal Income Tax Treatment of the Claimant Trust. 

Unless the IRS requires otherwise, for all United States federal income tax purposes, the 

parties shall treat the transfer of the Claimant Trust Assets to the Claimant Trust as: (a) a 

transfer of the Claimant Trust Assets (other than the amounts set aside in the Disputed Claims 

Reserve, if the Claimant Trustee makes the election described in Section 7 below) directly to the 

applicable Claimant Trust Beneficiaries followed by (b) the transfer by the such Claimant Trust 

Beneficiaries to the Claimant Trust of such Claimant Trust Assets in exchange for the Claimant 

Trust Interests. Accordingly, the applicable Claimant Trust Beneficiaries shall be treated for 

United States federal income tax purposes as the grantors and owners of their respective share of 

the Claimant Trust Assets. The foregoing treatment shall also apply, to the extent permitted by 

applicable law, for state and local income tax purposes.

9. Tax Reporting. 

(a) The Claimant Trustee shall file tax returns for the Claimant Trust treating the 

Claimant Trust as a grantor trust pursuant to Treasury Regulation section 1.671-4(a). The 

Claimant Trustee may file an election pursuant to Treasury Regulation 1.468B-9(c) to treat the 

Disputed Claims Reserve as a disputed ownership fund, in which case the Claimant Trustee will 

file federal income tax returns and pay taxes for the Disputed Claims Reserve as a separate 

taxable entity.

(b) The Claimant Trustee shall be responsible for payment, out of the Claimant Trust 

Assets, of any taxes imposed on the Claimant Trust or its assets. 

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(c) The Claimant Trustee shall determine the fair market value of the Claimant Trust 

Assets as of the Effective Date and notify the applicable Claimant Trust Beneficiaries of such 

valuation, and such valuation shall be used consistently for all federal income tax purposes. 

(d) The Claimant Trustee shall distribute such tax information to the applicable Claimant 

Trust Beneficiaries as the Claimant Trustee determines is required by applicable law. 

10. Claimant Trust Assets. 

The Claimant Trustee shall have the exclusive right, on behalf of the Claimant Trust, to 

institute, file, prosecute, enforce, abandon, settle, compromise, release, or withdraw any and all 

Causes of Action included in the Claimant Trust Assets (except for the Estate Claims) without 

any further order of the Bankruptcy Court, and the Claimant Trustee shall have the exclusive 

right, on behalf of the Claimant Trust, to sell, liquidate, or otherwise monetize all Claimant Trust 

Assets, except as otherwise provided in this Plan or in the Claimant Trust Agreement, without 

any further order of the Bankruptcy Court. Notwithstanding anything herein to the contrary, the 

Litigation Trustee shall have the exclusive right to institute, file, prosecute, enforce, abandon, 

settle, compromise, release, or withdraw any and all Estate Claims included in the Claimant 

Trust Assets without any further order of the Bankruptcy Court. 

From and after the Effective Date, the Trustees, in accordance with section 1123(b)(3) 

and (4) of the Bankruptcy Code, and on behalf of the Claimant Trust, shall each serve as a 

representative of the Estate with respect to any and all Claimant Trust Assets, including the 

Causes of Action and Estate Claims, as appropriate, and shall retain and possess the right to (a) 

commence, pursue, settle, compromise, or abandon, as appropriate, any and all Causes of Action 

in any court or other tribunal and (b) sell, liquidate, or otherwise monetize all Claimant Trust 

Assets.

11. Claimant Trust Expenses. 

From and after the Effective Date, the Claimant Trust shall, in the ordinary course of 

business and without the necessity of any approval by the Bankruptcy Court, pay the reasonable 

professional fees and expenses incurred by the Claimant Trust, the Litigation Sub-Trust, and any 

professionals retained by such parties and entities from the Claimant Trust Assets, except as 

otherwise provided in the Claimant Trust Agreement. 

12. Trust Distributions to Claimant Trust Beneficiaries. 

The Claimant Trustee, in its discretion, may make Trust Distributions to the Claimant 

Trust Beneficiaries at any time and/or use the Claimant Trust Assets or proceeds thereof, 

provided that such Trust Distributions or use is otherwise permitted under the terms of the Plan, 

the Claimant Trust Agreement, and applicable law.

13. Cash Investments. 

With the consent of the Claimant Trust Oversight Committee, the Claimant Trustee may 

invest Cash (including any earnings thereon or proceeds therefrom) in a manner consistent with 

the terms of the Claimant Trust Agreement; provided, however, that such investments are 

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000304

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investments permitted to be made by a “liquidating trust” within the meaning of Treasury 

Regulation section 301.7701-4(d), as reflected therein, or under applicable IRS guidelines, 

rulings or other controlling authorities. 

14. Dissolution of the Claimant Trust and Litigation Sub-Trust. 

The Trustees and the Claimant Trust and Litigation Sub-Trust shall be discharged or 

dissolved, as the case may be, at such time as: (a) the Litigation Trustee determines that the 

pursuit of Estate Claims is not likely to yield sufficient additional proceeds to justify further 

pursuit of such Estate Claims, (b) the Claimant Trustee determines that the pursuit of Causes of 

Action (other than Estate Claims) is not likely to yield sufficient additional proceeds to justify 

further pursuit of such Causes of Action, (c) the Clamant Trustee determines that the pursuit of 

sales of other Claimant Trust Assets is not likely to yield sufficient additional proceeds to justify 

further pursuit of such sales of Claimant Trust Assets, (d) all objections to Disputed Claims and 

Equity Interests are fully resolved, (e) the Reorganized Debtor is dissolved, and (f) all 

Distributions required to be made by the Claimant Trustee to the Claimant Trust Beneficiaries 

under the Plan have been made, but in no event shall the Claimant Trust be dissolved later than 

three years from the Effective Date unless the Bankruptcy Court, upon motion made within the 

six-month period before such third anniversary (and, in the event of further extension, by order 

of the Bankruptcy Court, upon motion made at least six months before the end of the preceding 

extension), determines that a fixed period extension (not to exceed two years, together with any 

prior extensions, without a favorable letter ruling from the Internal Revenue Service or an 

opinion of counsel that any further extension would not adversely affect the status of the 

Claimant Trust as a liquidating trust for federal income tax purposes) is necessary to facilitate or 

complete the recovery on, and liquidation of, the Claimant Trust Assets; provided, however, that 

each extension must be approved, upon a finding that the extension is necessary to facilitate or 

complete the recovery on, and liquidation of the Claimant Trust Assets, by the Bankruptcy Court 

within 6 months of the beginning of the extended term and no extension, together with any prior 

extensions, shall exceed three years without a favorable letter ruling from the Internal Revenue 

Service or an opinion of counsel that any further extension would not adversely affect the status 

of the Claimant Trust as a liquidating trust for federal income tax purposes. 

Upon dissolution of the Claimant Trust, and pursuant to the Claimant Trust Agreement, 

any remaining Claimant Trust Assets that exceed the amounts required to be paid under the Plan 

will be transferred (in the sole discretion of the Claimant Trustee) in Cash or in-kind to the 

Holders of the Claimant Trust Interests as provided in the Claimant Trust Agreement. 

C. The Reorganized Debtor

1. Corporate Existence 

The Debtor will continue to exist after the Effective Date, with all of the powers of 

partnerships pursuant to the law of the State of Delaware and as set forth in the Reorganized 

Limited Partnership Agreement. 

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000305

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2. Cancellation of Equity Interests and Release 

On the Effective Date, (i) all prepetition Equity Interests, including the Class A Limited 

Partnership Interests and the Class B/C Limited Partnership Interests, in the Debtor shall be 

canceled, and (ii) all obligations or debts owed by, or Claims against, the Debtor on account of, 

or based upon, the Interests shall be deemed as cancelled, released, and discharged, including all 

obligations or duties by the Debtor relating to the Equity Interests in any of the Debtor’s 

formation documents, including the Limited Partnership Agreement.

3. Issuance of New Partnership Interests 

On the Effective Date, the Debtor or the Reorganized Debtor, as applicable, will issue 

new Class A Limited Partnership Interests to (i) the Claimant Trust, as limited partner, and (ii) 

New GP LLC, as general partner, and will admit (a) the Claimant Trust as the limited partner of 

the Reorganized Debtor, and (b) New GP LLC as the general partner of the Reorganized Debtor. 

The Claimant Trust, as limited partner, will ratify New GP LLC’s appointment as general partner 

of the Reorganized Debtor. Also, on the Effective Date, the Claimant Trust, as limited partner, 

and New GP LLC, as general partner, will execute the Reorganized Limited Partnership 

Agreement and receive partnership interests in the Reorganized Debtor consistent with the terms 

of the Reorganized Limited Partnership Agreement. 

The Reorganized Limited Partnership Agreement does not provide for, and specifically 

disclaims, the indemnification obligations under the Limited Partnership Agreement, including 

any such indemnification obligations that accrued or arose or could have been brought prior to 

the Effective Date. Any indemnification Claims under the Limited Partnership Agreement that 

accrued, arose, or could have been filed prior to the Effective Date will be resolved through the 

Claims resolution process provided that a Claim is properly filed in accordance with the 

Bankruptcy Code, the Plan, or the Bar Date Order. Each of the Debtor, the Reorganized Debtor, 

the Claimant Trust, and the Litigation Sub-Trust reserve all rights with respect to any such 

indemnification Claims.

4. Management of the Reorganized Debtor 

Subject to and consistent with the terms of the Reorganized Limited Partnership 

Agreement, the Reorganized Debtor shall be managed by its general partner, New GP LLC. The 

initial officers and employees of the Reorganized Debtor shall be selected by the Claimant 

Trustee. The Reorganized Debtor may, in its discretion, also utilize a Sub-Servicer in addition to 

or in lieu of the retention of officers and employees. 

As set forth in the Reorganized Limited Partnership Agreement, New GP LLC will 

receive a fee for managing the Reorganized Debtor. Although New GP LLC will be a limited 

liability company, it will elect to be treated as a C-Corporation for tax purposes. Therefore, New 

GP LLC (and any taxable income attributable to it) will be subject to corporate income taxation 

on a standalone basis, which may reduce the return to Claimants. 

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000306

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5. Vesting of Assets in the Reorganized Debtor 

Except as otherwise provided in this Plan or the Confirmation Order, on or after the 

Effective Date, all Reorganized Debtor Assets will vest in the Reorganized Debtor, free and clear 

of all Liens, Claims, charges or other encumbrances pursuant to section 1141(c) of the 

Bankruptcy Code except with respect to such Liens, Claims, charges and other encumbrances 

that are specifically preserved under this Plan upon the Effective Date. 

The Reorganized Debtor shall be the exclusive trustee of the Reorganized Debtor Assets 

for purposes of 31 U.S.C. § 3713(b) and 26 U.S.C. § 6012(b)(3), as well as the representative of 

the Estate appointed pursuant to section 1123(b)(3)(B) of the Bankruptcy Code with respect to 

the Reorganized Debtor Assets. 

6. Purpose of the Reorganized Debtor 

Except as may be otherwise provided in this Plan or the Confirmation Order, the 

Reorganized Debtor will continue to manage the Reorganized Debtor Assets (which shall 

include, for the avoidance of doubt, serving as the investment manager of the Managed Funds) 

and may use, acquire or dispose of the Reorganized Debtor Assets and compromise or settle any 

Claims with respect to the Reorganized Debtor Assets without supervision or approval by the 

Bankruptcy Court and free of any restrictions of the Bankruptcy Code or Bankruptcy Rules. The 

Reorganized Debtor shall oversee the resolution of Claims in Class 1 through Class 7. 

Without limiting the foregoing, the Reorganized Debtor will pay the charges that it incurs 

after the Effective Date for Professionals’ fees, disbursements, expenses or related support 

services (including reasonable fees relating to the preparation of Professional fee applications) in 

the ordinary course of business and without application or notice to, or order of, the Bankruptcy

Court. 

7. Distribution of Proceeds from the Reorganized Debtor Assets; Transfer of 

Reorganized Debtor Assets 

Any proceeds received by the Reorganized Debtor will be distributed to the Claimant 

Trust, as limited partner, and New GP LLC, as general partner, in the manner set forth in the 

Reorganized Limited Partnership Agreement. As set forth in the Reorganized Limited 

Partnership Agreement, the Reorganized Debtor may, from time to time distribute Reorganized 

Debtor Assets to the Claimant Trust either in Cash or in-kind, including to institute the winddown and dissolution of the Reorganized Debtor. Any assets distributed to the Claimant Trust 

will be (i) deemed transferred in all respects as forth in ARTICLE IV.B.1, (ii) deemed Claimant 

Trust Assets, and (iii) administered as Claimant Trust Assets. 

D. Company Action 

Each of the Debtor, the Reorganized Debtor, and the Trustees, as applicable, may take 

any and all actions to execute, deliver, File or record such contracts, instruments, releases and 

other agreements or documents and take such actions as may be necessary or appropriate to 

effectuate and implement the provisions of this Plan, the Claimant Trust Agreement, the 

Reorganized Limited Partnership Agreement, or the New GP LLC Documents, as applicable, in 

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000307

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the name of and on behalf of the Debtor, the Reorganized Debtor, or the Trustees, as applicable, 

and in each case without further notice to or order of the Bankruptcy Court, act or action under 

applicable law, regulation, order, or rule or any requirement of further action, vote or other 

approval or authorization by the security holders, officers, or directors of the Debtor or the 

Reorganized Debtor, as applicable, or by any other Person. 

Prior to, on or after the Effective Date (as appropriate), all matters provided for pursuant 

to this Plan that would otherwise require approval of the stockholders, partners, directors, 

managers, or members of the Debtor, any Related Entity, or any Affiliate thereof (as of prior to 

the Effective Date) will be deemed to have been so approved and will be in effect prior to, on or 

after the Effective Date (as appropriate) pursuant to applicable law and without any requirement 

of further action by the stockholders, partners, directors, managers or members of such Persons, 

or the need for any approvals, authorizations, actions or consents of any Person. 

All matters provided for in this Plan involving the legal or corporate structure of the 

Debtor, the Reorganized Debtor, or the Claimant Trust, as applicable, and any legal or corporate 

action required by the Debtor, the Reorganized Debtor, or the Claimant Trust, as applicable, in 

connection with this Plan, will be deemed to have occurred and will be in full force and effect in 

all respects, in each case without further notice to or order of the Bankruptcy Court, act or action 

under applicable law, regulation, order, or rule or any requirement of further action, vote or other 

approval or authorization by the security holders, partners, directors, managers, or members of 

the Debtor, the Reorganized Debtor, or the Claimant Trust, as applicable, or by any other Person. 

On the Effective Date, the appropriate officers of the Debtor and the Reorganized Debtor, as 

applicable, as well as the Trustees, are authorized to issue, execute, deliver, and consummate the 

transactions contemplated by, the contracts, agreements, documents, guarantees, pledges, 

consents, securities, certificates, resolutions and instruments contemplated by or described in this 

Plan in the name of and on behalf of the Debtor and the Reorganized Debtor, as well as the 

Trustees, in each case without further notice to or order of the Bankruptcy Court, act or action 

under applicable law, regulation, order, or rule or any requirement of further action, vote or other 

approval or authorization by any Person. The appropriate officer of the Debtor, the Reorganized 

Debtor, as well as the Trustees, will be authorized to certify or attest to any of the foregoing 

actions.

E. Release of Liens, Claims and Equity Interests

Except as otherwise provided in the Plan or in any contract, instrument, release or other 

agreement or document entered into or delivered in connection with the Plan, from and after the 

Effective Date and concurrently with the applicable distributions made pursuant to the Plan, all 

Liens, Claims, Equity Interests, mortgages, deeds of trust, or other security interests against the 

property of the Estate will be fully released, terminated, extinguished and discharged, in each 

case without further notice to or order of the Bankruptcy Court, act or action under applicable 

law, regulation, order, or rule or the vote, consent, authorization or approval of any Entity. Any 

Entity holding such Liens or Equity Interests extinguished pursuant to the prior sentence will, 

pursuant to section 1142 of the Bankruptcy Code, promptly execute and deliver to the Debtor, 

the Reorganized Debtor, or the Claimant Trustee, as applicable, such instruments of termination, 

release, satisfaction and/or assignment (in recordable form) as may be reasonably requested by 

the Debtor, the Reorganized Debtor, or the Claimant Trustee, as applicable. For the avoidance of 

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000308

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doubt, this section is in addition to, and shall not be read to limit in any respects, ARTICLE 

IV.C.2.

F. Cancellation of Notes, Certificates and Instruments

Except for the purpose of evidencing a right to a distribution under this Plan and except 

as otherwise set forth in this Plan, on the Effective Date, all agreements, instruments, Securities 

and other documents evidencing any prepetition Claim or Equity Interest and any rights of any 

Holder in respect thereof shall be deemed cancelled, discharged, and of no force or effect. The 

holders of or parties to such cancelled instruments, Securities, and other documentation will have 

no rights arising from or related to such instruments, Securities, or other documentation or the 

cancellation thereof, except the rights provided for pursuant to this Plan, and the obligations of 

the Debtor thereunder or in any way related thereto will be fully released, terminated, 

extinguished and discharged, in each case without further notice to or order of the Bankruptcy 

Court, act or action under applicable law, regulation, order, or rule or any requirement of further 

action, vote or other approval or authorization by any Person. For the avoidance of doubt, this 

section is in addition to, and shall not be read to limit in any respects, ARTICLE IV.C.2.

G. Cancellation of Existing Instruments Governing Security Interests

Upon payment or other satisfaction of an Allowed Class 1 or Allowed Class 2 Claim, or 

promptly thereafter, the Holder of such Allowed Class 1 or Allowed Class 2 Claim shall deliver 

to the Debtor, the Reorganized Debtor, or the Claimant Trustee, as applicable, any collateral or 

other property of the Debtor held by such Holder, together with any termination statements, 

instruments of satisfaction, or releases of all security interests with respect to its Allowed Class 1 

or Allowed Class 2 Claim that may be reasonably required to terminate any related financing 

statements, mortgages, mechanics’ or other statutory Liens, or lis pendens, or similar interests or 

documents. 

H. Control Provisions 

To the extent that there is any inconsistency between this Plan as it relates to the 

Claimant Trust, the Claimant Trust Agreement, the Reorganized Debtor, or the Reorganized 

Limited Partnership Agreement, this Plan shall control. 

I. Treatment of Vacant Classes

Any Claim or Equity Interest in a Class considered vacant under ARTICLE III.C of this 

Plan shall receive no Plan Distributions. 

J. Plan Documents

The documents, if any, to be Filed as part of the Plan Documents, including any 

documents filed with the Plan Supplement, and any amendments, restatements, supplements, or 

other modifications to such documents, and any consents, waivers, or other deviations under or 

from any such documents, shall be incorporated herein by this reference (including to the 

applicable definitions in ARTICLE I hereof) and fully enforceable as if stated in full herein. 

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The Debtor and the Committee are currently working to finalize the forms of certain of 

the Plan Documents to be filed with the Plan Supplement. To the extent that the Debtor and the 

Committee cannot agree as to the form and content of such Plan Documents, they intend to 

submit the issue to non-binding mediation pursuant to the Order Directing Mediation entered on 

August 3, 2020 [D.I. 912]. 

K. Highland Capital Management, L.P. Retirement Plan and Trust

The Highland Capital Management, L.P. Retirement Plan And Trust (“Pension Plan”) is a 

single-employer defined benefit pension plan covered by Title IV of the Employee Retirement 

Income Security Act of 1974, as amended (“ERISA”). 29 U.S.C. §§ 1301-1461. The Debtor is 

the contributing sponsor and, as such, the PBGC asserts that the Debtor is liable along with any 

members of the contributing sponsor’s controlled-group within the meaning of 29 U.S.C. §§ 

1301(a)(13), (14) with respect to the Pension Plan. 

Upon the Effective Date, the Reorganized Debtor shall be deemed to have assumed the 

Pension Plan and shall comply with all applicable statutory provisions of ERISA and the Internal 

Revenue Code (the “IRC”), including, but not limited to, satisfying the minimum funding 

standards pursuant to 26 U.S.C. §§ 412, 430, and 29 U.S.C. §§ 1082, 1083; paying the PBGC 

premiums in accordance with 29 U.S.C. §§ 1306 and 1307; and administering the Pension Plan 

in accordance with its terms and the provisions of ERISA and the IRC. In the event that the 

Pension Plan terminates after the Plan of Reorganization Effective Date, the PBGC asserts that 

the Reorganized Debtor and each of its controlled group members will be responsible for the 

liabilities imposed by Title IV of ERISA. 

Notwithstanding any provision of the Plan, the Confirmation Order, or the Bankruptcy 

Code (including section 1141 thereof) to the contrary, neither the Plan, the Confirmation Order, 

or the Bankruptcy Code shall be construed as discharging, releasing, exculpating or relieving the 

Debtor, the Reorganized Debtor, or any person or entity in any capacity, from any liability or 

responsibility, if any, with respect to the Pension Plan under any law, governmental policy, or 

regulatory provision. PBGC and the Pension Plan shall not be enjoined or precluded from 

enforcing such liability or responsibility against any person or entity as a result of any of the 

provisions of the Plan, the Confirmation Order, or the Bankruptcy Code. The Debtor reserves 

the right to contest any such liability or responsibility. 

ARTICLE V.

TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

A. Assumption, Assignment, or Rejection of Executory Contracts and Unexpired 

Leases 

Unless an Executory Contract or Unexpired Lease: (i) was previously assumed or 

rejected by the Debtor pursuant to this Plan on or prior to the Confirmation Date; (ii) previously 

expired or terminated pursuant to its own terms or by agreement of the parties thereto; (iii) is the 

subject of a motion to assume filed by the Debtor on or before the Confirmation Date; (iv) 

contains a change of control or similar provision that would be triggered by the Chapter 11 Case 

(unless such provision has been irrevocably waived); or (v) is specifically designated as a 

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000310

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contract or lease to be assumed in the Plan or the Plan Supplement, on the Confirmation Date, 

each Executory Contract and Unexpired Lease shall be deemed rejected pursuant to section 365 

of the Bankruptcy Code, without the need for any further notice to or action, order, or approval 

of the Bankruptcy Court, unless such Executory Contract or Unexpired Lease is listed in the Plan 

Supplement. 

At any time on or prior to the Confirmation Date, the Debtor may (i) amend the Plan 

Supplement in order to add or remove a contract or lease from the list of contracts to be assumed 

or (ii) assign (subject to applicable law) any Executory Contract or Unexpired Lease, as 

determined by the Debtor in consultation with the Committee, or the Reorganized Debtor, as 

applicable.

The Confirmation Order will constitute an order of the Bankruptcy Court approving the 

above-described assumptions, rejections, and assumptions and assignments. Except as otherwise 

provided herein or agreed to by the Debtor and the applicable counterparty, each assumed 

Executory Contract or Unexpired Lease shall include all modifications, amendments, 

supplements, restatements, or other agreements related thereto, and all rights related thereto. 

Modifications, amendments, supplements, and restatements to prepetition Executory Contracts 

and Unexpired Leases that have been executed by the Debtor during the Chapter 11 Case shall 

not be deemed to alter the prepetition nature of the Executory Contract or Unexpired Lease or the 

validity, priority, or amount of any Claims that may arise in connection therewith. To the extent 

applicable, no change of control (or similar provision) will be deemed to occur under any such 

Executory Contract or Unexpired Lease. 

If certain, but not all, of a contract counterparty’s Executory Contracts and/or Unexpired 

Leases are rejected pursuant to the Plan, the Confirmation Order shall be a determination that 

such counterparty’s Executory Contracts and/or Unexpired Leases that are being assumed 

pursuant to the Plan are severable agreements that are not integrated with those Executory 

Contracts and/or Unexpired Leases that are being rejected pursuant to the Plan. Parties seeking 

to contest this finding with respect to their Executory Contracts and/or Unexpired Leases must 

file a timely objection to the Plan on the grounds that their agreements are integrated and not 

severable, and any such dispute shall be resolved by the Bankruptcy Court at the Confirmation 

Hearing (to the extent not resolved by the parties prior to the Confirmation Hearing). 

Notwithstanding anything herein to the contrary, the Debtor shall assume or reject that 

certain real property lease with Crescent TC Investors L.P. (“Landlord”) for the Debtor’s 

headquarters located at 200/300 Crescent Ct., Suite #700, Dallas, Texas 75201 (the “Lease”) in 

accordance with the notice to Landlord, procedures and timing required by 11 U.S.C. §365(d)(4), 

as modified by that certain Agreed Order Granting Motion to Extend Time to Assume or Reject 

Unexpired Nonresidential Real Property Lease [Docket No. 1122]. 

B. Claims Based on Rejection of Executory Contracts or Unexpired Leases 

Any Executory Contract or Unexpired Lease not assumed or rejected on or before the 

Confirmation Date shall be deemed rejected, pursuant to the Confirmation Order. Any Person 

asserting a Rejection Claim shall File a proof of claim within thirty days of the Effective Date.

Any Rejection Claims that are not timely Filed pursuant to this Plan shall be forever disallowed 

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and barred. If one or more Rejection Claims are timely Filed, the Claimant Trustee may File an 

objection to any Rejection Claim.

Rejection Claims shall be classified as General Unsecured Claims and shall be treated in 

accordance with ARTICLE III of this Plan. 

C. Cure of Defaults for Assumed or Assigned Executory Contracts and Unexpired 

Leases 

Any monetary amounts by which any Executory Contract or Unexpired Lease to be 

assumed or assigned hereunder is in default shall be satisfied, under section 365(b)(1) of the 

Bankruptcy Code, by the Debtor upon assumption or assignment thereof, by payment of the 

default amount in Cash as and when due in the ordinary course or on such other terms as the 

parties to such Executory Contracts may otherwise agree. The Debtor may serve a notice on the 

Committee and parties to Executory Contracts or Unexpired Leases to be assumed or assigned 

reflecting the Debtor’s or Reorganized Debtor’s intention to assume or assign the Executory 

Contract or Unexpired Lease in connection with this Plan and setting forth the proposed cure 

amount (if any). 

If a dispute regarding (1) the amount of any payments to cure a default, (2) the ability of 

the Debtor, the Reorganized Debtor, or any assignee to provide “adequate assurance of future 

performance” (within the meaning of section 365 of the Bankruptcy Code) under the Executory 

Contract or Unexpired Lease to be assumed or assigned or (3) any other matter pertaining to 

assumption or assignment, the cure payments required by section 365(b)(1) of the Bankruptcy 

Code will be made following the entry of a Final Order or orders resolving the dispute and 

approving the assumption or assignment. 

Assumption or assignment of any Executory Contract or Unexpired Lease pursuant to the 

Plan or otherwise and full payment of any applicable cure amounts pursuant to this ARTICLE 

V.C shall result in the full release and satisfaction of any cure amounts, Claims, or defaults, 

whether monetary or nonmonetary, including defaults of provisions restricting the change in 

control or ownership interest composition or other bankruptcy-related defaults, arising under any 

assumed or assigned Executory Contract or Unexpired Lease at any time prior to the effective 

date of assumption or assignment. Any and all Proofs of Claim based upon Executory Contracts 

or Unexpired Leases that have been assumed or assigned in the Chapter 11 Case, including 

pursuant to the Confirmation Order, and for which any cure amounts have been fully paid 

pursuant to this ARTICLE V.C, shall be deemed disallowed and expunged as of the 

Confirmation Date without the need for any objection thereto or any further notice to or action, 

order, or approval of the Bankruptcy Court. 

ARTICLE VI.

PROVISIONS GOVERNING DISTRIBUTIONS

A. Dates of Distributions

Except as otherwise provided in this Plan, on the Effective Date or as soon as reasonably 

practicable thereafter (or if a Claim is not an Allowed Claim or Equity Interest on the Effective 

Date, on the date that such Claim or Equity Interest becomes an Allowed Claim or Equity 

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Interest, or as soon as reasonably practicable thereafter), each Holder of an Allowed Claim or 

Equity Interest against the Debtor shall receive the full amount of the distributions that this Plan 

provides for Allowed Claims or Allowed Equity Interests in the applicable Class and in the 

manner provided herein. If any payment or act under this Plan is required to be made or 

performed on a date that is not on a Business Day, then the making of such payment or the 

performance of such act may be completed on the next succeeding Business Day, but shall be 

deemed to have been completed as of the required date. If and to the extent there are Disputed 

Claims or Equity Interests, distributions on account of any such Disputed Claims or Equity 

Interests shall be made pursuant to the provisions provided in this Plan. Except as otherwise 

provided in this Plan, Holders of Claims and Equity Interests shall not be entitled to interest, 

dividends or accruals on the distributions provided for therein, regardless of whether 

distributions are delivered on or at any time after the Effective Date. 

Upon the Effective Date, all Claims and Equity Interests against the Debtor shall be 

deemed fixed and adjusted pursuant to this Plan and none of the Debtor, the Reorganized Debtor, 

or the Claimant Trust will have liability on account of any Claims or Equity Interests except as 

set forth in this Plan and in the Confirmation Order. All payments and all distributions made by 

the Distribution Agent under this Plan shall be in full and final satisfaction, settlement and 

release of all Claims and Equity Interests against the Debtor and the Reorganized Debtor. 

At the close of business on the Distribution Record Date, the transfer ledgers for the 

Claims against the Debtor and the Equity Interests in the Debtor shall be closed, and there shall 

be no further changes in the record holders of such Claims and Equity Interests. The Debtor, the 

Reorganized Debtor, the Trustees, and the Distribution Agent, and each of their respective 

agents, successors, and assigns shall have no obligation to recognize the transfer of any Claims 

against the Debtor or Equity Interests in the Debtor occurring after the Distribution Record Date 

and shall be entitled instead to recognize and deal for all purposes hereunder with only those 

record holders stated on the transfer ledgers as of the close of business on the Distribution 

Record Date irrespective of the number of distributions to be made under this Plan to such 

Persons or the date of such distributions. 

B. Distribution Agent

Except as provided herein, all distributions under this Plan shall be made by the Claimant 

Trustee, as Distribution Agent, or by such other Entity designated by the Claimant Trustee, as a 

Distribution Agent on the Effective Date or thereafter. The Reorganized Debtor will be the 

Distribution Agent with respect to Claims in Class 1 through Class 7. 

The Claimant Trustee, or such other Entity designated by the Claimant Trustee to be the 

Distribution Agent, shall not be required to give any bond or surety or other security for the 

performance of such Distribution Agent’s duties unless otherwise ordered by the Bankruptcy 

Court. 

The Distribution Agent shall be empowered to (a) effect all actions and execute all 

agreements, instruments, and other documents necessary to perform its duties under this Plan; 

(b) make all distributions contemplated hereby; (c) employ professionals to represent it with 

respect to its responsibilities; and (d) exercise such other powers as may be vested in the 

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000313

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Distribution Agent by order of the Bankruptcy Court, pursuant to this Plan, or as deemed by the 

Distribution Agent to be necessary and proper to implement the provisions hereof. 

The Distribution Agent shall not have any obligation to make a particular distribution to a 

specific Holder of an Allowed Claim if such Holder is also the Holder of a Disputed Claim. 

C. Cash Distributions

Distributions of Cash may be made by wire transfer from a domestic bank, except that 

Cash payments made to foreign creditors may be made in such funds and by such means as the 

Distribution Agent determines are necessary or customary in a particular foreign jurisdiction.

D. Disputed Claims Reserve

On or prior to the Initial Distribution Date, the Claimant Trustee shall establish, fund and 

maintain the Disputed Claims Reserve(s) in the appropriate Disputed Claims Reserve Amounts 

on account of any Disputed Claims. 

E. Distributions from the Disputed Claims Reserve

The Disputed Claims Reserve shall at all times hold Cash in an amount no less than the 

Disputed Claims Reserve Amount. To the extent a Disputed Claim becomes an Allowed Claim 

pursuant to the terms of this Plan, within 30 days of the date on which such Disputed Claim 

becomes an Allowed Claim pursuant to the terms of this Plan, the Claimant Trustee shall 

distribute from the Disputed Claims Reserve to the Holder thereof any prior distributions, in 

Cash, that would have been made to such Allowed Claim if it had been Allowed as of the 

Effective Date. For the avoidance of doubt, each Holder of a Disputed Claim that subsequently 

becomes an Allowed Claim will also receive its Pro Rata share of the Claimant Trust Interests. 

If, upon the resolution of all Disputed Claims any Cash remains in the Disputed Claims Reserve, 

such Cash shall be transferred to the Claimant Trust and be deemed a Claimant Trust Asset. 

F. Rounding of Payments 

Whenever this Plan would otherwise call for, with respect to a particular Person, payment 

of a fraction of a dollar, the actual payment or distribution shall reflect a rounding of such 

fraction to the nearest whole dollar (up or down), with half dollars being rounded down. To the 

extent that Cash to be distributed under this Plan remains undistributed as a result of the 

aforementioned rounding, such Cash or stock shall be treated as “Unclaimed Property” under this 

Plan.

G. De Minimis Distribution

Except as to any Allowed Claim that is Unimpaired under this Plan, none of the Debtor,

the Reorganized Debtor, or the Distribution Agent shall have any obligation to make any Plan 

Distributions with a value of less than $100, unless a written request therefor is received by the 

Distribution Agent from the relevant recipient at the addresses set forth in ARTICLE VI.J hereof 

within 120 days after the later of the (i) Effective Date and (ii) the date such Claim becomes an 

Allowed Claim. De minimis distributions for which no such request is timely received shall 

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000314

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revert to the Claimant Trust. Upon such reversion, the relevant Allowed Claim (and any Claim 

on account of missed distributions) shall be automatically deemed satisfied, discharged and 

forever barred, notwithstanding any federal or state escheat laws to the contrary.

H. Distributions on Account of Allowed Claims

Except as otherwise agreed by the Holder of a particular Claim or as provided in this 

Plan, all distributions shall be made pursuant to the terms of this Plan and the Confirmation 

Order. Except as otherwise provided in this Plan, distributions to any Holder of an Allowed 

Claim shall, to the extent applicable, be allocated first to the principal amount of any such 

Allowed Claim, as determined for U.S. federal income tax purposes and then, to the extent the 

consideration exceeds such amount, to the remainder of such Claim comprising accrued but 

unpaid interest, if any (but solely to the extent that interest is an allowable portion of such 

Allowed Claim). 

I. General Distribution Procedures

The Distribution Agent shall make all distributions of Cash or other property required 

under this Plan, unless this Plan specifically provides otherwise. All Cash and other property 

held by the Debtor, the Reorganized Debtor, or the Claimant Trust, as applicable, for ultimate 

distribution under this Plan shall not be subject to any claim by any Person. 

J. Address for Delivery of Distributions

Distributions to Holders of Allowed Claims, to the extent provided for under this Plan, 

shall be made (1) at the addresses set forth in any written notices of address change delivered to 

the Debtor and the Distribution Agent; (2) at the address set forth on any Proofs of Claim Filed 

by such Holders (to the extent such Proofs of Claim are Filed in the Chapter 11 Case), (2), or (3) 

at the addresses in the Debtor’s books and records. 

If there is any conflict or discrepancy between the addresses set forth in (1) through (3) in 

the foregoing sentence, then (i) the address in Section (2) shall control; (ii) if (2) does not apply, 

the address in (1) shall control, and (iii) if (1) does not apply, the address in (3) shall control. 

K. Undeliverable Distributions and Unclaimed Property

If the distribution to the Holder of any Allowed Claim is returned to the Reorganized 

Debtor or the Claimant Trust as undeliverable, no further distribution shall be made to such 

Holder, and Distribution Agent shall not have any obligation to make any further distribution to 

the Holder, unless and until the Distribution Agent is notified in writing of such Holder’s then 

current address.

Any Entity that fails to claim any Cash within six months from the date upon which a 

distribution is first made to such Entity shall forfeit all rights to any distribution under this Plan 

and such Cash shall thereafter be deemed an Claimant Trust Asset in all respects and for all 

purposes. Entities that fail to claim Cash shall forfeit their rights thereto and shall have no claim 

whatsoever against the Debtor’s Estate, the Reorganized Debtor, the Claimant Trust, or against 

any Holder of an Allowed Claim to whom distributions are made by the Distribution Agent.

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000315

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L. Withholding Taxes 

In connection with this Plan, to the extent applicable, the Distribution Agent shall comply 

with all tax withholding and reporting requirements imposed on them by any Governmental Unit, 

and all distributions made pursuant to this Plan shall be subject to such withholding and 

reporting requirements. The Distribution Agent shall be entitled to deduct any U.S. federal, state 

or local withholding taxes from any Cash payments made with respect to Allowed Claims, as 

appropriate. As a condition to receiving any distribution under this Plan, the Distribution Agent 

may require that the Holder of an Allowed Claim entitled to receive a distribution pursuant to 

this Plan provide such Holder’s taxpayer identification number and such other information and 

certification as may be deemed necessary for the Distribution Agent to comply with applicable 

tax reporting and withholding laws. If a Holder fails to comply with such a request within one 

year, such distribution shall be deemed an unclaimed distribution. Any amounts withheld 

pursuant hereto shall be deemed to have been distributed to and received by the applicable 

recipient for all purposes of this Plan. 

M. Setoffs

The Distribution Agent may, to the extent permitted under applicable law, set off against

any Allowed Claim and any distributions to be made pursuant to this Plan on account of such 

Allowed Claim, the claims, rights and causes of action of any nature that the Debtor, the 

Reorganized Debtor, or the Distribution Agent may hold against the Holder of such Allowed 

Claim that are not otherwise waived, released or compromised in accordance with this Plan; 

provided, however, that neither such a setoff nor the allowance of any Claim hereunder shall 

constitute a waiver or release by the Debtor, the Reorganized Debtor, or the Claimant Trustee of 

any such claims, rights and causes of action that the Debtor, the Reorganized Debtor, or 

Claimant Trustee possesses against such Holder. Any Holder of an Allowed Claim subject to 

such setoff reserves the right to challenge any such setoff in the Bankruptcy Court or any other 

court with jurisdiction with respect to such challenge.

N. Surrender of Cancelled Instruments or Securities

As a condition precedent to receiving any distribution pursuant to this Plan on account of 

an Allowed Claim evidenced by negotiable instruments, securities, or notes canceled pursuant to 

ARTICLE IV of this Plan, the Holder of such Claim will tender the applicable negotiable 

instruments, securities, or notes evidencing such Claim (or a sworn affidavit identifying the 

negotiable instruments, securities, or notes formerly held by such Holder and certifying that they 

have been lost), to the Distribution Agent unless waived in writing by the Distribution Agent. 

O. Lost, Stolen, Mutilated or Destroyed Securities

In addition to any requirements under any applicable agreement and applicable law, any 

Holder of a Claim or Equity Interest evidenced by a security or note that has been lost, stolen, 

mutilated, or destroyed will, in lieu of surrendering such security or note to the extent required 

by this Plan, deliver to the Distribution Agent: (i) evidence reasonably satisfactory to the 

Distribution Agent of such loss, theft, mutilation, or destruction; and (ii) such security or 

indemnity as may be required by the Distribution Agent to hold such party harmless from any 

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000316

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damages, liabilities, or costs incurred in treating such individual as a Holder of an Allowed 

Claim or Equity Interest. Upon compliance with ARTICLE VI.O of this Plan as determined by 

the Distribution Agent, by a Holder of a Claim evidenced by a security or note, such Holder will, 

for all purposes under this Plan, be deemed to have surrendered such security or note to the 

Distribution Agent. 

ARTICLE VII.

PROCEDURES FOR RESOLVING CONTINGENT, 

UNLIQUIDATED AND DISPUTED CLAIMS

A. Filing of Proofs of Claim 

Unless such Claim appeared in the Schedules and is not listed as disputed, contingent, or 

unliquidated, or such Claim has otherwise been Allowed or paid, each Holder of a Claim was 

required to file a Proof of Claim on or prior to the Bar Date. 

B. Disputed Claims

Following the Effective Date, each of the Reorganized Debtor or the Claimant Trustee, as 

applicable, may File with the Bankruptcy Court an objection to the allowance of any Disputed 

Claim or Disputed Equity Interest, request the Bankruptcy Court subordinate any Claims to 

Subordinated Claims, or any other appropriate motion or adversary proceeding with respect to 

the foregoing by the Claims Objection Deadline or, at the discretion of the Reorganized Debtor 

or Claimant Trustee, as applicable, compromised, settled, withdrew or resolved without further 

order of the Bankruptcy Court, and (ii) unless otherwise provided in the Confirmation Order, the 

Reorganized Debtor or the Claimant Trust, as applicable, are authorized to settle, or withdraw 

any objections to, any Disputed Claim or Disputed Equity Interests following the Effective Date 

without further notice to creditors (other than the Entity holding such Disputed Claim or 

Disputed Equity Interest) or authorization of the Bankruptcy Court, in which event such Claim or 

Equity Interest shall be deemed to be an Allowed Claim or Equity Interest in the amount 

compromised for purposes of this Plan. 

C. Procedures Regarding Disputed Claims or Disputed Equity Interests

No payment or other distribution or treatment shall be made on account of a Disputed 

Claim or Disputed Equity Interest unless and until such Disputed Claim or Disputed Equity 

Interest becomes an Allowed Claim or Equity Interests and the amount of such Allowed Claim 

or Equity Interest, as applicable, is determined by order of the Bankruptcy Court or by 

stipulation between the Reorganized Debtor or Claimant Trust, as applicable, and the Holder of 

the Claim or Equity Interest.

D. Allowance of Claims and Equity Interests 

Following the date on which a Disputed Claim or Disputed Equity Interest becomes an 

Allowed Claim or Equity Interest after the Distribution Date, the Distribution Agent shall make a 

distribution to the Holder of such Allowed Claim or Equity Interest in accordance with the Plan. 

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000317

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1. Allowance of Claims 

After the Effective Date and subject to the other provisions of this Plan, the Reorganized 

Debtor or the Claimant Trust, as applicable, will have and will retain any and all rights and 

defenses under bankruptcy or nonbankruptcy law that the Debtor had with respect to any Claim. 

Except as expressly provided in this Plan or in any order entered in the Chapter 11 Case prior to 

the Effective Date (including, without limitation, the Confirmation Order), no Claim or Equity 

Interest will become an Allowed Claim or Equity Interest unless and until such Claim or Equity 

Interest is deemed Allowed under this Plan or the Bankruptcy Code or the Bankruptcy Court has 

entered an order, including, without limitation, the Confirmation Order, in the Chapter 11 Case 

allowing such Claim or Equity Interest. 

2. Estimation

Subject to the other provisions of this Plan, the Debtor, prior to the Effective Date, and 

the Reorganized Debtor or the Claimant Trustee, as applicable, after the Effective Date, may, at 

any time, request that the Bankruptcy Court estimate (a) any Disputed Claim or Disputed Equity 

Interest pursuant to applicable law and in accordance with this Plan and (b) any contingent or 

unliquidated Claim pursuant to applicable law, including, without limitation, section 502(c) of 

the Bankruptcy Code, and the Bankruptcy Court will retain jurisdiction under 28 U.S.C. §§ 157 

and 1334 to estimate any Disputed Claim or Disputed Equity Interest, contingent Claim or 

unliquidated Claim, including during the litigation concerning any objection to any Claim or 

Equity Interest or during the pendency of any appeal relating to any such objection. All of the 

aforementioned objection, estimation and resolution procedures are cumulative and not exclusive 

of one another. Claims or Equity Interests may be estimated and subsequently compromised, 

settled, withdrawn or resolved by any mechanism approved by the Bankruptcy Court. The rights 

and objections of all parties are reserved in connection with any such estimation proceeding. 

3. Disallowance of Claims

Any Claims or Equity Interests held by Entities from which property is recoverable under 

sections 542, 543, 550, or 553 of the Bankruptcy Code, or that are a transferee of a transfer 

avoidable under sections 522(f), 522(h), 544, 545, 547, 548, 549, or 724(a) of the Bankruptcy 

Code, shall be deemed disallowed pursuant to section 502(d) of the Bankruptcy Code, and 

holders of such Claims or Interests may not receive any distributions on account of such Claims 

or Interests until such time as such Causes of Action against that Entity have been settled or a 

Bankruptcy Court Order with respect thereto has been entered and all sums due, if any, to the 

Reorganized Debtor or the Claimant Trust, as applicable, by that Entity have been turned over or 

paid to the Reorganized Debtor or the Claimant Trust, as applicable. 

EXCEPT AS OTHERWISE PROVIDED HEREIN OR AS AGREED TO BY THE 

DEBTOR, REORGANIZED DEBTOR, OR CLAIMANT TRUSTEE, AS APPLICABLE, 

ANY AND ALL PROOFS OF CLAIM FILED AFTER THE BAR DATE SHALL BE 

DEEMED DISALLOWED AND EXPUNGED AS OF THE EFFECTIVE DATE 

WITHOUT ANY FURTHER NOTICE TO OR ACTION, ORDER, OR APPROVAL OF 

THE BANKRUPTCY COURT, AND HOLDERS OF SUCH CLAIMS MAY NOT 

RECEIVE ANY DISTRIBUTIONS ON ACCOUNT OF SUCH CLAIMS, UNLESS SUCH 

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000318

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LATE PROOF OF CLAIM HAS BEEN DEEMED TIMELY FILED BY A FINAL 

ORDER.

ARTICLE VIII.

EFFECTIVENESS OF THIS PLAN

A. Conditions Precedent to the Effective Date 

The Effective Date of this Plan will be conditioned upon the satisfaction or waiver by the 

Debtor (and, to the extent such condition requires the consent of the Committee, the consent of 

the Committee with such consent not to be unreasonably withheld), pursuant to the provisions of 

ARTICLE VIII.B of this Plan of the following: 

x This Plan and the Plan Documents, including the Claimant Trust Agreement and the 

Reorganized Limited Partnership Agreement, and all schedules, documents, 

supplements and exhibits to this Plan shall have been Filed in form and substance 

reasonably acceptable to the Debtor and the Committee.

x The Confirmation Order shall have become a Final Order and shall be in form and 

substance reasonably acceptable to the Debtor and the Committee. The Confirmation 

Order shall provide that, among other things, (i) the Debtor, the Reorganized Debtor, 

the Claimant Trustee, or the Litigation Trustee are authorized to take all actions 

necessary or appropriate to effectuate and consummate this Plan, including, without 

limitation, (a) entering into, implementing, effectuating, and consummating the 

contracts, instruments, releases, and other agreements or documents created in 

connection with or described in this Plan, (b) assuming the Executory Contracts and 

Unexpired Leases set forth in the Plan Supplement, (c) making all distributions and 

issuances as required under this Plan; and (d) entering into any transactions as set 

forth in the Plan Documents; (ii) the provisions of the Confirmation Order and this 

Plan are nonseverable and mutually dependent; (iii) the implementation of this Plan in 

accordance with its terms is authorized; (iv) pursuant to section 1146 of the 

Bankruptcy Code, the delivery of any deed or other instrument or transfer order, in 

furtherance of, or in connection with this Plan, including any deeds, bills of sale, or 

assignments executed in connection with any disposition or transfer of Assets 

contemplated under this Plan, shall not be subject to any Stamp or Similar Tax; and 

(v) the vesting of the Claimant Trust Assets in the Claimant Trust and the 

Reorganized Debtor Assets in the Reorganized Debtor, in each case as of the 

Effective Date free and clear of liens and claims to the fullest extent permissible 

under applicable law pursuant to section 1141(c) of the Bankruptcy Code except with 

respect to such Liens, Claims, charges and other encumbrances that are specifically 

preserved under this Plan upon the Effective Date. 

x All documents and agreements necessary to implement this Plan, including without 

limitation, the Reorganized Limited Partnership Agreement, the Claimant Trust 

Agreement, and the New GP LLC Documents, in each case in form and substance 

reasonably acceptable to the Debtor and the Committee, shall have (a) been tendered 

for delivery, and (b) been effected by, executed by, or otherwise deemed binding 

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000319

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upon, all Entities party thereto and shall be in full force and effect. All conditions 

precedent to such documents and agreements shall have been satisfied or waived 

pursuant to the terms of such documents or agreements. 

x All authorizations, consents, actions, documents, approvals (including any 

governmental approvals), certificates and agreements necessary to implement this 

Plan, including, without limitation, the Reorganized Limited Partnership Agreement, 

the Claimant Trust Agreement, and the New GP LLC Documents, shall have been 

obtained, effected or executed and delivered to the required parties and, to the extent 

required, filed with the applicable governmental units in accordance with applicable 

laws and any applicable waiting periods shall have expired without any action being 

taken or threatened by any competent authority that would restrain or prevent 

effectiveness or consummation of the Restructuring. 

x The Debtor shall have obtained applicable directors’ and officers’ insurance coverage 

that is acceptable to each of the Debtor, the Committee, the Claimant Trust Oversight 

Committee, the Claimant Trustee and the Litigation Trustee.

x The Professional Fee Reserve shall be funded pursuant to this Plan in an amount 

determined by the Debtor in good faith. 

B. Waiver of Conditions 

The conditions to effectiveness of this Plan set forth in this ARTICLE VIII (other than 

that the Confirmation Order shall have been entered) may be waived in whole or in part by the 

Debtor (and, to the extent such condition requires the consent of the Committee, the consent of 

the Committee) and any applicable parties in Section VII.A of this Plan, without notice, leave or 

order of the Bankruptcy Court or any formal action other than proceeding to confirm or 

effectuate this Plan. The failure to satisfy or waive a condition to the Effective Date may be 

asserted by the Debtor regardless of the circumstances giving rise to the failure of such condition 

to be satisfied. The failure of the Debtor to exercise any of the foregoing rights will not be 

deemed a waiver of any other rights, and each right will be deemed an ongoing right that may be 

asserted at any time by the Debtor, the Reorganized Debtor, or the Claimant Trust, as applicable.

C. Dissolution of the Committee

On the Effective Date, the Committee will dissolve, and the members of the Committee 

and the Committee’s Professionals will cease to have any role arising from or relating to the 

Chapter 11 Case, except in connection with final fee applications of Professionals for services 

rendered prior to the Effective Date (including the right to object thereto). The Professionals 

retained by the Committee and the members thereof will not be entitled to assert any fee claims 

for any services rendered to the Committee or expenses incurred in the service of the Committee 

after the Effective Date, except for reasonable fees for services rendered, and actual and 

necessary costs incurred, in connection with any applications for allowance of Professional Fees 

pending on the Effective Date or filed and served after the Effective Date pursuant to the Plan. 

Nothing in the Plan shall prohibit or limit the ability of the Debtor’s or Committee’s 

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000320

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Professionals to represent either of the Trustees or to be compensated or reimbursed per the Plan 

and the Claimant Trust Agreement in connection with such representation. 

ARTICLE IX.

EXCULPATION, INJUNCTION AND RELATED PROVISIONS

A. General

Notwithstanding anything contained in the Plan to the contrary, the allowance, 

classification and treatment of all Allowed Claims and Equity Interests and their respective 

distributions and treatments under the Plan shall take into account the relative priority and rights 

of the Claims and the Equity Interests in each Class in connection with any contractual, legal and 

equitable subordination rights relating thereto whether arising under general principles of 

equitable subordination, section 510 of the Bankruptcy Code, or otherwise. 

B. Discharge of Claims 

To the fullest extent provided under section 1141(d)(1)(A) and other applicable 

provisions of the Bankruptcy Code, except as otherwise expressly provided by this Plan or the 

Confirmation Order, all consideration distributed under this Plan will be in exchange for, and in 

complete satisfaction, settlement, discharge, and release of, all Claims and Equity Interests of 

any kind or nature whatsoever against the Debtor or any of its Assets or properties, and 

regardless of whether any property will have been distributed or retained pursuant to this Plan on 

account of such Claims or Equity Interests. Except as otherwise expressly provided by this Plan 

or the Confirmation Order, upon the Effective Date, the Debtor and its Estate will be deemed 

discharged and released under and to the fullest extent provided under section 1141(d)(1)(A) and 

other applicable provisions of the Bankruptcy Code from any and all Claims and Equity Interests 

of any kind or nature whatsoever, including, but not limited to, demands and liabilities that arose 

before the Confirmation Date, and all debts of the kind specified in section 502(g), 502(h), or 

502(i) of the Bankruptcy Code. 

C. Exculpation 

Subject in all respects to ARTICLE XII.D of this Plan, to the maximum extent permitted 

by applicable law, no Exculpated Party will have or incur, and each Exculpated Party is hereby 

exculpated from, any claim, obligation, suit, judgment, damage, demand, debt, right, Cause of 

Action, remedy, loss, and liability for conduct occurring on or after the Petition Date in 

connection with or arising out of (i) the filing and administration of the Chapter 11 Case; (ii) the 

negotiation and pursuit of the Disclosure Statement, the Plan, or the solicitation of votes for, or 

confirmation of, the Plan; (iii) the funding or consummation of the Plan (including the Plan 

Supplement) or any related agreements, instruments, or other documents, the solicitation of votes 

on the Plan, the offer, issuance, and Plan Distribution of any securities issued or to be issued 

pursuant to the Plan, including the Claimant Trust Interests, whether or not such Plan 

Distributions occur following the Effective Date; (iv) the implementation of the Plan; and (v) any 

negotiations, transactions, and documentation in connection with the foregoing clauses (i)-(iv); 

provided, however, the foregoing will not apply to (a) any acts or omissions of an Exculpated 

Party arising out of or related to acts or omissions that constitute bad faith, fraud, gross 

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000321

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negligence, criminal misconduct, or willful misconduct or (b) Strand or any Employee other than 

with respect to actions taken by such Entities from the date of appointment of the Independent 

Directors through the Effective Date. This exculpation shall be in addition to, and not in 

limitation of, all other releases, indemnities, exculpations, any other applicable law or rules, or 

any other provisions of this Plan, including ARTICLE IV.C.2, protecting such Exculpated 

Parties from liability.

D. Releases by the Debtor 

On and after the Effective Date, each Released Party is deemed to be, hereby 

conclusively, absolutely, unconditionally, irrevocably, and forever released and discharged by 

the Debtor and the Estate, in each case on behalf of themselves and their respective successors, 

assigns, and representatives, including, but not limited to, the Claimant Trust and the Litigation 

Sub-Trust from any and all Causes of Action, including any derivative claims, asserted on behalf 

of the Debtor, whether known or unknown, foreseen or unforeseen, matured or unmatured, 

existing or hereafter arising, in law, equity, contract, tort or otherwise, that the Debtor or the 

Estate would have been legally entitled to assert in their own right (whether individually or 

collectively) or on behalf of the holder of any Claim against, or Interest in, a Debtor or other 

Person. 

Notwithstanding anything contained herein to the contrary, the foregoing release does not 

release: (i) any obligations of any party under the Plan or any document, instrument, or 

agreement executed to implement the Plan, (ii) the rights or obligations of any current employee 

of the Debtor under any employment agreement or plan, (iii) the rights of the Debtor with respect 

to any confidentiality provisions or covenants restricting competition in favor of the Debtor 

under any employment agreement with a current or former employee of the Debtor, (iv) any 

Avoidance Actions, or (v) any Causes of Action arising from willful misconduct, criminal 

misconduct, actual fraud, or gross negligence of such applicable Released Party as determined by 

Final Order of the Bankruptcy Court or any other court of competent jurisdiction. 

Notwithstanding anything herein to the contrary, any release provided pursuant to this 

ARTICLE IX.D (i) with respect to a Senior Employee, is conditioned in all respects on (a) such 

Senior Employee executing a Senior Employee Stipulation on or prior to the Effective Date and 

(b) the reduction of such Senior Employee’s Allowed Claim as set forth in the Senior Employee 

Stipulation (such amount, the “Reduced Employee Claim”), and (ii) with respect to any 

Employee, including a Senior Employee, shall be deemed null and void and of no force and 

effect (1) if there is more than one member of the Claimant Trust Oversight Committee who does 

not represent entities holding a Disputed or Allowed Claim (the “Independent Members”), the 

Claimant Trustee and the Independent Members by majority vote determine or (2) if there is only 

one Independent Member, the Independent Member after discussion with the Claimant Trustee, 

determines (in each case after discussing with the full Claimant Trust Oversight Committee) that 

such Employee (regardless of whether the Employee is then currently employed by the Debtor, 

the Reorganized Debtor, or the Claimant Trustee): 

x sues, attempts to sue, or threatens or works with or assists any entity or person to sue, 

attempt to sue, or threaten the Reorganized Debtor, the Claimant Trust, the Litigation 

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000322

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Sub-Trust, or any of their respective employees or agents, or any Released Party on or 

in connection with any claim or cause of action arising prior to the Effective Date, 

x has taken any action that, impairs or harms the value of the Claimant Trust Assets or 

the Reorganized Debtor Assets, or 

x (x) upon the request of the Claimant Trustee, has failed to provide reasonable 

assistance in good faith to the Claimant Trustee or the Reorganized Debtor with 

respect to (1) the monetization of the Claimant Trust Assets or Reorganized Debtor 

Assets, as applicable, or (2) the resolution of Claims, or (y) has taken any action that 

impedes or frustrates the Claimant Trustee or the Reorganized Debtor with respect to 

any of the foregoing. 

Provided, however, that the release provided pursuant to this ARTICLE IX.D will vest and the 

Employee will be indefeasibly released pursuant to this ARTICLE IX.D if such Employee’s 

release has not been deemed null and void and of no force and effect on or prior to the date that 

is the date of dissolution of the Claimant Trust pursuant to the Claimant Trust Agreement. 

By executing the Senior Employee Stipulation embodying this release, each Senior 

Employee acknowledges and agrees, without limitation, to the terms of this release and the 

tolling agreement contained in the Senior Employee Stipulation.

The provisions of this release and the execution of a Senior Employee Stipulation will not 

in any way prevent or limit any Employee from (i) prosecuting its Claims, if any, against the 

Debtor’s Estate, (ii) defending him or herself against any claims or causes of action brought 

against the Employee by a third party, or (iii) assisting other persons in defending themselves 

from any Estate Claims brought by the Litigation Trustee (but only with respect to Estate Claims 

brought by the Litigation Trustee and not collection or other actions brought by the Claimant 

Trustee). 

E. Preservation of Rights of Action 

1. Maintenance of Causes of Action 

Except as otherwise provided in this Plan, after the Effective Date, the Reorganized 

Debtor or the Claimant Trust will retain all rights to commence, pursue, litigate or settle, as 

appropriate, any and all Causes of Action included in the Reorganized Debtor Assets or Claimant 

Trust Assets, as applicable, whether existing as of the Petition Date or thereafter arising, in any 

court or other tribunal including, without limitation, in an adversary proceeding Filed in the 

Chapter 11 Case and, as the successors in interest to the Debtor and the Estate, may, and will 

have the exclusive right to, enforce, sue on, settle, compromise, transfer or assign (or decline to 

do any of the foregoing) any or all of the Causes of Action without notice to or approval from the 

Bankruptcy Court. 

2. Preservation of All Causes of Action Not Expressly Settled or Released 

Unless a Cause of Action against a Holder of a Claim or an Equity Interest or other Entity 

is expressly waived, relinquished, released, compromised or settled in this Plan or any Final 

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000323

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Order (including, without limitation, the Confirmation Order), such Cause of Action is expressly 

reserved for later adjudication by the Reorganized Debtor or Claimant Trust, as applicable 

(including, without limitation, Causes of Action not specifically identified or of which the 

Debtor may presently be unaware or that may arise or exist by reason of additional facts or 

circumstances unknown to the Debtor at this time or facts or circumstances that may change or 

be different from those the Debtor now believes to exist) and, therefore, no preclusion doctrine, 

including, without limitation, the doctrines of res judicata, collateral estoppel, issue preclusion, 

claim preclusion, waiver, estoppel (judicial, equitable or otherwise) or laches will apply to such 

Causes of Action as a consequence of the confirmation, effectiveness, or consummation of this 

Plan based on the Disclosure Statement, this Plan or the Confirmation Order, except where such 

Causes of Action have been expressly released in this Plan or any other Final Order (including, 

without limitation, the Confirmation Order). In addition, the right of the Reorganized Debtor or 

the Claimant Trust to pursue or adopt any claims alleged in any lawsuit in which the Debtor is a 

plaintiff, defendant or an interested party, against any Entity, including, without limitation, the 

plaintiffs or co-defendants in such lawsuits, is expressly reserved.

F. Injunction

Upon entry of the Confirmation Order, all Enjoined Parties are and shall be 

permanently enjoined, on and after the Effective Date, from taking any actions to interfere 

with the implementation or consummation of the Plan. 

Except as expressly provided in the Plan, the Confirmation Order, or a separate 

order of the Bankruptcy Court, all Enjoined Parties are and shall be permanently 

enjoined, on and after the Effective Date, with respect to any Claims and Equity Interests, 

from directly or indirectly (i) commencing, conducting, or continuing in any manner any 

suit, action, or other proceeding of any kind (including any proceeding in a judicial, 

arbitral, administrative or other forum) against or affecting the Debtor or the property of 

the Debtor, (ii) enforcing, levying, attaching (including any prejudgment attachment), 

collecting, or otherwise recovering, enforcing, or attempting to recover or enforce, by any 

manner or means, any judgment, award, decree, or order against the Debtor or the 

property of the Debtor, (iii) creating, perfecting, or otherwise enforcing in any manner, any 

security interest, lien or encumbrance of any kind against the Debtor or the property of the 

Debtor, (iv) asserting any right of setoff, directly or indirectly, against any obligation due to

the Debtor or against property or interests in property of the Debtor, except to the limited 

extent permitted under Sections 553 and 1141 of the Bankruptcy Code, and (v) acting or 

proceeding in any manner, in any place whatsoever, that does not conform to or comply 

with the provisions of the Plan.

The injunctions set forth herein shall extend to, and apply to any act of the type set 

forth in any of clauses (i)-(v) of the immediately preceding paragraph against any 

successors of the Debtor, including, but not limited to, the Reorganized Debtor, the 

Litigation Sub-Trust, and the Claimant Trust and their respective property and interests in 

property.

Subject in all respects to ARTICLE XII.D, no Enjoined Party may commence or 

pursue a claim or cause of action of any kind against any Protected Party that arose or 

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000324

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arises from or is related to the Chapter 11 Case, the negotiation of the Plan, the 

administration of the Plan or property to be distributed under the Plan, the wind down of 

the business of the Debtor or Reorganized Debtor, the administration of the Claimant 

Trust or the Litigation Sub-Trust, or the transactions in furtherance of the foregoing 

without the Bankruptcy Court (i) first determining, after notice and a hearing, that such 

claim or cause of action represents a colorable claim of any kind, including, but not limited 

to, negligence, bad faith, criminal misconduct, willful misconduct, fraud, or gross 

negligence against a Protected Party and (ii) specifically authorizing such Enjoined Party

to bring such claim or cause of action against any such Protected Party; provided, however,

the foregoing will not apply to a claim or cause of action against Strand or against any 

Employee other than with respect to actions taken, respectively, by Strand or by such 

Employee from the date of appointment of the Independent Directors through the Effective 

Date. The Bankruptcy Court will have sole and exclusive jurisdiction to determine 

whether a claim or cause of action is colorable and, only to the extent legally permissible 

and as provided for in ARTICLE XI, shall have jurisdiction to adjudicate the underlying 

colorable claim or cause of action. 

G. Duration of Injunctions and Stays 

ARTICLE II. Unless otherwise provided in this Plan, in the Confirmation Order, or 

in a Final Order of the Bankruptcy Court, (i) all injunctions and stays entered during the 

Chapter 11 Case and in existence on the Confirmation Date shall remain in full force and 

effect in accordance with their terms; and (ii) the automatic stay arising under section 362 

of the Bankruptcy Code shall remain in full force and effect subject to Section 362(c) of the 

Bankruptcy Code, and to the extent necessary if the Debtor does not receive a discharge,

the Court will enter an equivalent order under Section 105.

H. Continuance of January 9 Order 

Unless otherwise provided in this Plan, in the Confirmation Order, or in a Final Order of 

the Bankruptcy Court, the restrictions set forth in paragraphs 9 and 10 of the Order Approving 

Settlement with Official Committee of Unsecured Creditors Regarding Governance of the Debtor 

and Procedures for Operations in the Ordinary Course, entered by the Bankruptcy Court on 

January 9, 2020 [D.I. 339] shall remain in full force and effect following the Effective Date. 

ARTICLE X.

BINDING NATURE OF PLAN

On the Effective Date, and effective as of the Effective Date, the Plan, including, without 

limitation, the provisions in ARTICLE IX, will bind, and will be deemed binding upon, all 

Holders of Claims against and Equity Interests in the Debtor and such Holder’s respective 

successors and assigns, to the maximum extent permitted by applicable law, notwithstanding 

whether or not such Holder will receive or retain any property or interest in property under the 

Plan. All Claims and Debts shall be fixed and adjusted pursuant to this Plan. The Plan shall also 

bind any taxing authority, recorder of deeds, or similar official for any county, state, 

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000325

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53

Governmental Unit or parish in which any instrument related to the Plan or related to any 

transaction contemplated thereby is to be recorded with respect to nay taxes of the kind specified 

in Bankruptcy Code section 1146(a). 

ARTICLE XI.

RETENTION OF JURISDICTION

Pursuant to sections 105 and 1142 of the Bankruptcy Code and notwithstanding the entry 

of the Confirmation Order and the occurrence of the Effective Date, the Bankruptcy Court shall, 

after the Effective Date, retain such jurisdiction over the Chapter 11 Case and all Entities with 

respect to all matters related to the Chapter 11 Case, the Reorganized Debtor, the Claimant Trust, 

and this Plan to the maximum extent legally permissible, including, without limitation, 

jurisdiction to:

x allow, disallow, determine, liquidate, classify, estimate or establish the priority, 

secured, unsecured, or subordinated status of any Claim or Equity Interest, including, 

without limitation, the resolution of any request for payment of any Administrative 

Expense Claim and the resolution of any and all objections to the allowance or 

priority of any Claim or Equity Interest;

x grant or deny any applications for allowance of compensation or reimbursement of 

expenses authorized pursuant to the Bankruptcy Code or this Plan, for periods ending 

on or before the Effective Date; provided, however, that, from and after the Effective 

Date, the Reorganized Debtor shall pay Professionals in the ordinary course of 

business for any work performed after the Effective Date subject to the terms of this 

Plan and the Confirmation Order, and such payment shall not be subject to the 

approval of the Bankruptcy Court; 

x resolve any matters related to the assumption, assignment or rejection of any 

Executory Contract or Unexpired Lease to which the Debtor is party or with respect 

to which the Debtor, Reorganized Debtor, or Claimant Trust may be liable and to 

adjudicate and, if necessary, liquidate, any Claims arising therefrom, including, 

without limitation, any dispute regarding whether a contract or lease is or was 

executory or expired;

x make any determination with respect to a claim or cause of action against a Protected 

Party as set forth in ARTICLE IX;

x resolve any claim or cause of action against an Exculpated Party or Protected Party 

arising from or related to the Chapter 11 Case, the negotiation of this Plan, the 

administration of the Plan or property to be distributed under the Plan, the wind down 

of the business of the Debtor or Reorganized Debtor, or the transactions in 

furtherance of the foregoing;

x if requested by the Reorganized Debtor or the Claimant Trustee, authorize, approve, 

and allow any sale, disposition, assignment or other transfer of the Reorganized 

Debtor Assets or Claimant Trust Assets, including any break-up compensation or 

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000326

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54

expense reimbursement that may be requested by a purchaser thereof; provided, 

however, that neither the Reorganized Debtor nor the Claimant Trustee shall be 

required to seek such authority or approval from the Bankruptcy Court unless 

otherwise specifically required by this Plan or the Confirmation Order; 

x if requested by the Reorganized Debtor or the Claimant Trustee, authorize, approve, 

and allow any borrowing or the incurrence of indebtedness, whether secured or 

unsecured by the Reorganized Debtor or Claimant Trust; provided, however, that 

neither the Reorganized Debtor nor the Claimant Trustee shall be required to seek 

such authority or approval from the Bankruptcy Court unless otherwise specifically 

required by this Plan or the Confirmation Order; 

x resolve any issues related to any matters adjudicated in the Chapter 11 Case;

x ensure that distributions to Holders of Allowed Claims and Allowed Equity Interests 

are accomplished pursuant to the provisions of this Plan; 

x decide or resolve any motions, adversary proceedings, contested or litigated matters 

and any other Causes of Action (including Estate Claims) that are pending as of the 

Effective Date or that may be commenced in the future, including approval of any 

settlements, compromises, or other resolutions as may be requested by the Debtor, the 

Reorganized Debtor, the Claimant Trustee, or the Litigation Trustee whether under 

Bankruptcy Rule 9019 or otherwise, and grant or deny any applications involving the

Debtor that may be pending on the Effective Date or instituted by the Reorganized 

Debtor, the Claimant Trustee, or Litigation Trustee after the Effective Date, provided 

that the Reorganized Debtor, the Claimant Trustee, and the Litigation Trustee shall 

reserve the right to commence actions in all appropriate forums and jurisdictions; 

x enter such orders as may be necessary or appropriate to implement, effectuate, or 

consummate the provisions of this Plan, the Plan Documents, and all other contracts, 

instruments, releases, and other agreements or documents adopted in connection with 

this Plan, the Plan Documents, or the Disclosure Statement; 

x resolve any cases, controversies, suits or disputes that may arise in connection with 

the implementation, effectiveness, consummation, interpretation, or enforcement of 

this Plan or any Entity’s obligations incurred in connection with this Plan; 

x issue injunctions and enforce them, enter and implement other orders or take such 

other actions as may be necessary or appropriate to restrain interference by any Entity 

with implementation, effectiveness, consummation, or enforcement of this Plan, 

except as otherwise provided in this Plan; 

x enforce the terms and conditions of this Plan and the Confirmation Order; 

x resolve any cases, controversies, suits or disputes with respect to the release, 

exculpation, indemnification, and other provisions contained herein and enter such 

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000327

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55

orders or take such others actions as may be necessary or appropriate to implement or 

enforce all such releases, injunctions and other provisions; 

x enter and implement such orders or take such others actions as may be necessary or 

appropriate if the Confirmation Order is modified, stayed, reversed, revoked or 

vacated;

x resolve any other matters that may arise in connection with or relate to this Plan, the 

Disclosure Statement, the Confirmation Order, the Plan Documents, or any contract, 

instrument, release, indenture or other agreement or document adopted in connection 

with this Plan or the Disclosure Statement; and

x enter an order concluding or closing the Chapter 11 Case after the Effective Date.

ARTICLE XII.

MISCELLANEOUS PROVISIONS

A. Payment of Statutory Fees and Filing of Reports 

All outstanding Statutory Fees shall be paid on the Effective Date. All such fees payable, 

and all such fees that become due and payable, after the Effective Date shall be paid by the 

Reorganized Debtor when due or as soon thereafter as practicable until the Chapter 11 Case is 

closed, converted, or dismissed. The Claimant Trustee shall File all quarterly reports due prior to 

the Effective Date when they become due, in a form reasonably acceptable to the U.S. Trustee. 

After the Effective Date, the Claimant Trustee shall File with the Bankruptcy Court quarterly 

reports when they become due, in a form reasonably acceptable to the U.S. Trustee. The 

Reorganized Debtor shall remain obligated to pay Statutory Fees to the Office of the U.S. 

Trustee until the earliest of the Debtor’s case being closed, dismissed, or converted to a case 

under chapter 7 of the Bankruptcy Code. 

B. Modification of Plan 

Effective as of the date hereof and subject to the limitations and rights contained in this 

Plan: (a) the Debtor reserves the right, in accordance with the Bankruptcy Code and the 

Bankruptcy Rules, to amend or modify this Plan prior to the entry of the Confirmation Order 

with the consent of the Committee, such consent not to be unreasonably withheld; and (b) after 

the entry of the Confirmation Order, the Debtor may, after notice and hearing and entry of an 

order of the Bankruptcy Court, amend or modify this Plan, in accordance with section 1127(b) of 

the Bankruptcy Code or remedy any defect or omission or reconcile any inconsistency in this 

Plan in such manner as may be necessary to carry out the purpose and intent of this Plan.

C. Revocation of Plan 

The Debtor reserves the right to revoke or withdraw this Plan prior to the Confirmation 

Date and to File a subsequent chapter 11 plan with the consent of the Committee. If the Debtor 

revokes or withdraws this Plan prior to the Confirmation Date, then: (i) this Plan shall be null 

and void in all respects; (ii) any settlement or compromise embodied in this Plan, assumption of 

Executory Contracts or Unexpired Leases effected by this Plan and any document or agreement 

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000328

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56

executed pursuant hereto shall be deemed null and void except as may be set forth in a separate 

order entered by the Bankruptcy Court; and (iii) nothing contained in this Plan shall: 

(a) constitute a waiver or release of any Claims by or against, or any Equity Interests in, the 

Debtor or any other Entity; (b) prejudice in any manner the rights of the Debtor or any other 

Entity; or (c) constitute an admission, acknowledgement, offer or undertaking of any sort by the 

Debtor or any other Entity. 

D. Obligations Not Changed

Notwithstanding anything in this Plan to the contrary, nothing herein will affect or 

otherwise limit or release any non-Debtor Entity’s (including any Exculpated Party’s) duties or 

obligations, including any contractual and indemnification obligations, to the Debtor, the 

Reorganized Debtor, or any other Entity whether arising under contract, statute, or otherwise. 

E. Entire Agreement

Except as otherwise described herein, this Plan supersedes all previous and 

contemporaneous negotiations, promises, covenants, agreements, understandings, and 

representations on such subjects, all of which have become merged and integrated into this Plan. 

F. Closing of Chapter 11 Case

The Claimant Trustee shall, after the Effective Date and promptly after the full 

administration of the Chapter 11 Case, File with the Bankruptcy Court all documents required by 

Bankruptcy Rule 3022 and any applicable order of the Bankruptcy Court to close the Chapter 11 

Case. 

G. Successors and Assigns

This Plan shall be binding upon and inure to the benefit of the Debtor and its successors 

and assigns, including, without limitation, the Reorganized Debtor and the Claimant Trustee. 

The rights, benefits, and obligations of any Person or Entity named or referred to in this Plan 

shall be binding on, and shall inure to the benefit of, any heir, executor, administrator, successor, 

or assign of such Person or Entity. 

H. Reservation of Rights 

Except as expressly set forth herein, this Plan shall have no force or effect unless and 

until the Bankruptcy Court enters the Confirmation Order and the Effective Date occurs. Neither 

the filing of this Plan, any statement or provision contained herein, nor the taking of any action 

by the Debtor, the Reorganized Debtor, the Claimant Trustee, or any other Entity with respect to

this Plan shall be or shall be deemed to be an admission or waiver of any rights of: (1) the 

Debtor, the Reorganized Debtor, or the Claimant Trustee with respect to the Holders of Claims 

or Equity Interests or other Entity; or (2) any Holder of a Claim or an Equity Interest or other 

Entity prior to the Effective Date.

Neither the exclusion or inclusion by the Debtor of any contract or lease on any exhibit, 

schedule, or other annex to this Plan or in the Plan Documents, nor anything contained in this 

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000329

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57

Plan, will constitute an admission by the Debtor that any such contract or lease is or is not an 

executory contract or lease or that the Debtor, the Reorganized Debtor, the Claimant Trustee, or 

their respective Affiliates has any liability thereunder. 

Except as explicitly provided in this Plan, nothing herein shall waive, excuse, limit, 

diminish, or otherwise alter any of the defenses, claims, Causes of Action, or other rights of the 

Debtor, the Reorganized Debtor, or the Claimant Trustee under any executory or non-executory 

contract.

Nothing in this Plan will increase, augment, or add to any of the duties, obligations, 

responsibilities, or liabilities of the Debtor, the Reorganized Debtor, or the Claimant Trustee, as 

applicable, under any executory or non-executory contract or lease.

If there is a dispute regarding whether a contract or lease is or was executory at the time 

of its assumption under this Plan, the Debtor, the Reorganized Debtor, or the Claimant Trustee, 

as applicable, shall have thirty (30) days following entry of a Final Order resolving such dispute 

to alter their treatment of such contract.

I. Further Assurances

The Debtor, the Reorganized Debtor, or the Claimant Trustee, as applicable, all Holders 

of Claims and Equity Interests receiving distributions hereunder, and all other Entities shall, 

from time to time, prepare, execute and deliver any agreements or documents and take any other 

actions as may be necessary or advisable to effectuate the provisions and intent of this Plan or 

the Confirmation Order. On or before the Effective Date, the Debtor shall File with the 

Bankruptcy Court all agreements and other documents that may be necessary or appropriate to 

effectuate and further evidence the terms and conditions hereof. 

J. Severability

If, prior to the Confirmation Date, any term or provision of this Plan is determined by the 

Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy Court will have the 

power to alter and interpret such term or provision to make it valid or enforceable to the 

maximum extent practicable, consistent with the original purpose of the term or provision held to 

be invalid, void, or unenforceable, and such term or provision will then be applicable as altered 

or interpreted. Notwithstanding any such holding, alteration or interpretation, the remainder of 

the terms and provisions of this Plan will remain in full force and effect and will in no way be 

affected, impaired, or invalidated by such holding, alteration, or interpretation. The 

Confirmation Order will constitute a judicial determination and will provide that each term and 

provision of this Plan, as it may have been altered or interpreted in accordance with the 

foregoing, is valid and enforceable pursuant to its terms. 

K. Service of Documents

All notices, requests, and demands to or upon the Debtor, the Reorganized Debtor, or the 

Claimant Trustee to be effective shall be in writing and, unless otherwise expressly provided 

herein, shall be deemed to have been duly given or made when actually delivered addressed as 

follows: 

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000330

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58

If to the Claimant Trust:

Highland Claimant Trust

c/o Highland Capital Management, L.P. 

300 Crescent Court, Suite 700 

Dallas, Texas 75201 

Attention: James P. Seery, Jr.

If to the Debtor:

Highland Capital Management, L.P. 

300 Crescent Court, Suite 700 

Dallas, Texas 75201 

Attention: James P. Seery, Jr.

with copies to:

Pachulski Stang Ziehl & Jones LLP

10100 Santa Monica Blvd., 13th Floor 

Los Angeles, CA 90067 

Telephone: (310) 277-6910 

Facsimile: (310) 201-0760 

Attn: Jeffrey N. Pomerantz, Esq.

Ira D. Kharasch, Esq.

 Gregory V. Demo, Esq. 

If to the Reorganized Debtor:

Highland Capital Management, L.P. 

300 Crescent Court, Suite 700 

Dallas, Texas 75201 

Attention: James P. Seery, Jr.

with copies to:

Pachulski Stang Ziehl & Jones LLP

10100 Santa Monica Blvd., 13th Floor 

Los Angeles, CA 90067 

Attn: Jeffrey N. Pomerantz, Esq. 

Ira D. Kharasch, Esq.

 Gregory V. Demo, Esq. 

L. Exemption from Certain Transfer Taxes Pursuant to Section 1146(a) of the 

Bankruptcy Code

To the extent permitted by applicable law, pursuant to section 1146(a) of the Bankruptcy 

Code, any transfers of property pursuant hereto shall not be subject to any Stamp or Similar Tax 

or governmental assessment in the United States, and the Confirmation Order shall direct the 

appropriate federal, state or local governmental officials or agents or taxing authority to forego 

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000331

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59

the collection of any such Stamp or Similar Tax or governmental assessment and to accept for 

filing and recordation instruments or other documents pursuant to such transfers of property 

without the payment of any such Stamp or Similar Tax or governmental assessment. Such 

exemption specifically applies, without limitation, to (i) all actions, agreements and documents 

necessary to evidence and implement the provisions of and the distributions to be made under 

this Plan; (ii) the maintenance or creation of security or any Lien as contemplated by this Plan; 

and (iii) assignments, sales, or transfers executed in connection with any transaction occurring 

under this Plan. 

M. Governing Law 

Except to the extent that the Bankruptcy Code, the Bankruptcy Rules or other federal 

law is applicable, or to the extent that an exhibit or schedule to this Plan provides otherwise, 

the rights and obligations arising under this Plan shall be governed by, and construed and 

enforced in accordance with, the laws of Texas, without giving effect to the principles of 

conflicts of law of such jurisdiction; provided, however, that corporate governance matters

relating to the Debtor, the Reorganized Debtor, New GP LLC, or the Claimant Trust, as

applicable, shall be governed by the laws of the state of organization of the Debtor, the 

Reorganized Debtor, New GP LLC, or the Claimant Trustee, as applicable.

N. Tax Reporting and Compliance 

The Debtor is hereby authorized to request an expedited determination under 

section 505(b) of the Bankruptcy Code of the tax liability of the Debtor is for all taxable periods 

ending after the Petition Date through, and including, the Effective Date. 

O. Exhibits and Schedules

All exhibits and schedules to this Plan, if any, including the Exhibits and the Plan 

Documents, are incorporated and are a part of this Plan as if set forth in full herein. 

P. Controlling Document

In the event of an inconsistency between this Plan and any other instrument or document 

created or executed pursuant to this Plan, or between this Plan and the Disclosure Statement, this 

Plan shall control. The provisions of this Plan, the Disclosure Statement, and any Plan 

Document, on the one hand, and of the Confirmation Order, on the other hand, shall be construed 

in a manner consistent with each other so as to effectuate the purposes of each; provided, 

however, that if there is determined to be any inconsistency between any provision of this Plan, 

the Disclosure Statement, and any Plan Document, on the one hand, and any provision of the 

Confirmation Order, on the other hand, that cannot be so reconciled, then, solely to the extent of 

such inconsistency, the provisions of the Confirmation Order shall govern, and any such 

provisions of the Confirmation Order shall be deemed a modification of this Plan, the Disclosure 

Statement, and the Plan Documents, as applicable. 

[Remainder of Page Intentionally Blank]

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000332

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DOCS_NY:40509.39 36027/002

Dated: January 22, 2021

Respectfully submitted,

HIGHLAND CAPITAL MANAGEMENT, L.P. 

By:

James P. Seery, Jr.

Chief Executive Officer and Chief Restructuring

Officer

Prepared by: 

PACHULSKI STANG ZIEHL & JONES LLP

Jeffrey N. Pomerantz (CA Bar No.143717)

Ira D. Kharasch (CA Bar No. 109084)

Gregory V. Demo (NY Bar No. 5371992)

10100 Santa Monica Boulevard, 13th Floor

Los Angeles, CA 90067

Telephone: (310) 277-6910

Facsimile: (310) 201-0760

Email: jpomerantz@pszjlaw.com

ikharasch@pszjlaw.com

gdemo@pszjlaw.com

and 

HAYWARD & ASSOCIATES PLLC

Melissa S. Hayward (TX Bar No. 24044908)

Zachery Z. Annable (TX Bar No. 24053075)

10501 N. Central Expy, Ste. 106

Dallas, TX 75231

Telephone: (972) 755-7100

Facsimile: (972) 755-7110

Email: MHayward@HaywardFirm.com

ZAnnable@HaywardFirm.com

Counsel for the Debtor and Debtor-in-Possession

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000333

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EXHIBIT 

Appx. 0249

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000334

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NOTICE OF APPEAL PAGE 1OF 3

D. Michael Lynn – State Bar ID 12736500

John Y. Bonds, III – State Bar ID 02589100

Clay M. Taylor – State Bar ID 24033261

Bryan C. Assink – State Bar ID 24089009

BONDS ELLIS EPPICH SCHAFER JONES LLP

420 Throckmorton Street, Suite 1000

Fort Worth, Texas 76102

(817) 405-6900 – Telephone

(817) 405-6902 – Facsimile

Michael.lynn@bondsellis.com

john@bondsellis.com

clay.taylor@bondsellis.com

bryan.assink@bondsellis.com

ATTORNEYS FOR JAMES DONDERO

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

In re: § Case No. 19-34054-SGJ-11

§

HIGHLAND CAPITAL MANAGEMENT, LP, §

§ Chapter 11

§

Debtor. §

NOTICE OF APPEAL

James Dondero (the “Appellant”), creditor, indirect equity holder, and party-in-interest in 

the above styled and numbered bankruptcy case (the “Bankruptcy Case”) of Highland Capital 

Management, L.P. (the “Debtor”), and pursuant to 28 U.S.C. § 158(a), hereby appeals to the United 

States District Court for the Northern District of Texas that certain Order (i) Confirming the Fifth 

Amended Plan of Reorganization of Highland Capital Management, L.P. (as Modified) and (ii) 

Granting Related Relief (the “Confirmation Order”) entered by the Bankruptcy Court on February 

22, 2021 at docket no. 1943 in the Bankruptcy Case.1

1 Appellant anticipates that the Appeal will actually be certified for a direct appeal to the 5th Circuit by agreement of 

all Appellants and Appellee based on the parties’ prior agreements, but hereby directs this appeal to the District 

Court as that direct appeal to the Circuit Court is not yet procedurally ripe. 

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 ̈1¤}HV5#( #L«

1934054210308000000000003

Docket #1990 Date Filed: 03/08/2021

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000335

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NOTICE OF APPEAL PAGE 2OF 3

A copy of the Confirmation Order is attached hereto as Exhibit “A.”

The names of the parties to the Confirmation Order, and the contact information for their 

attorneys, is as follows:

1. Appellant:2

James Dondero

Attorneys:

D. Michael Lynn

John Y. Bonds

Clay M. Taylor

Bryan C. Assink

Bonds Ellis Eppich Schafer Jones LLP

420 Throckmorton Street, Ste. 1000

Fort Worth, Texas 76102

Telephone: (817) 405-6900

Facsimile: (817) 405-6902 

Michael.lynn@bondsellis.com

john@bondsellis.com

clay.taylor@bondsellis.com

bryan.assink@bondsellis.com

2 Two other Notices of Appeal have already been filed by other Appellants to this Order and are found at Docket Nos.

1957 and 1966 which were filed by Highland Capital Management Fund Advisors, L.P. and NexPoint Advisors, L.P. 

on the one hand; and Highland Income Fund, NexPoint Strategic Opportunities Fund, Highland Global Allocation 

Fund, and NexPoint Capital, Inc. on the other hand, respectively. It is possible that other appellants may additionally 

file separate notices of appeal. 

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000336

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NOTICE OF APPEAL PAGE 3OF 3

2. Appellee:

Highland Capital Management, L.P.

Attorneys:

Jeffrey N. Pomerantz

Ira D. Kharasch

John A. Morris

Gregory V. Demo

Hayley R. Winograd

Pachulski Stang Ziehl & Jones, L.L.P.

10100 Santa Monica Blvd., 13th Floor

Los Angeles, CA 90067

Telephone: (310) 277-6910

Facsimile: (310) 201-0760

Email: jpomerantz@pszjlaw.com

ikharasch@pszjlaw.com

jmorris@pszjlaw.com

gdemo@pszjlaw.com

hwinograd@pszjlaw.com

Signed: March 4, 2021.

BONDS ELLIS EPPICH SCHAFER JONES LLP

By: /s/ Clay M. Taylor____________

Clay M. Taylor

Texas Bar No. 24033261

420 Throckmorton Street, Ste. 1000

Fort Worth, Texas 76102

Telephone: (817) 405-6900

Facsimile: (817) 405-6902

Email: clay.taylor@bondsellis.com

ATTORNEYS FOR JAMES DONDERO

CERTIFICATE OF SERVICE

The undersigned hereby certifies that, on this on March 4, 2021, true and correct copies 

of this document were electronically served by the Court’s ECF system on parties entitled to 

notice thereof, including on counsel for the Appellee.

By: /s/ Clay M. Taylor____________

Clay M. Taylor

Case 19-34054-sgj11 Doc 1990 Filed 03/08/21 Entered 03/08/21 06:24:28 Page 3 of 164

Appx. 0252

Case 3:21-cv-01710-N Document 10-5 Filed 10/05/21 Page 4 of 4 PageID 306

Case 22-03052-sgj Doc 10-5 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 5 Page 4 of 4

000337

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 79 of 208 PageID 407
EXHIBIT 

Appx. 0253

Case 3:21-cv-01710-N Document 10-6 Filed 10/05/21 Page 1 of 8 PageID 307

Case 22-03052-sgj Doc 10-6 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 6 Page 1 of 8

000338

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 80 of 208 PageID 408
 

K&L GATES LLP 

Artoush Varshosaz (TX Bar No. 24066234) 

1717 Main Street, Suite 2800 

Dallas, TX 75201 

Tel: (214) 939-5659 

artoush.varshosaz@klgates.com 

A. Lee Hogewood, III (pro hac vice) 

4350 Lassiter at North Hills Ave., Suite 300 

Raleigh, NC 27609 

Tel: (919) 743-7306 

Lee.hogewood@klgates.com 

Counsel for Highland Income Fund, NexPoint 

Strategic Opportunities Fund, Highland Global 

Allocation Fund, and NexPoint Capital, Inc.

IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE NORTHERN DISTRICT OF TEXAS 

DALLAS DIVISION 

 

 ) 

In re: ) Chapter 11 

 ) 

HIGHLAND CAPITAL MANAGEMENT, L.P. ) Case No. 19-34054 (SGJ11) 

 ) 

 Debtor. ) (Jointly Administered) 

 ) 

 ) 

NOTICE OF APPEAL

Part 1: Identify the appellants 

1. Names of appellants: 

Highland Income Fund, NexPoint Strategic Opportunities Fund, Highland Global 

Allocation Fund, and NexPoint Capital, Inc. 

2. Position of appellants in the adversary proceeding or bankruptcy case that is the subject 

of this appeal: 

For appeals in an adversary 

proceeding: 

__ Plaintiff 

__ Defendant 

__ Other (describe) ___________ 

For appeals in a bankruptcy case and not in 

an adversary proceeding: 

__ Debtor 

__ Creditor 

__ Trustee 

X_ Other (describe) _Interested parties_____ 

Case 19-34054-sgj11 Doc 1986 Filed 03/08/21 Entered 03/08/21 06:14:10 Page 1 of 3

Appx. 0254

 ̈1¤}HV5#( !0«

1934054210308000000000001

Docket #1986 Date Filed: 03/08/2021

Case 3:21-cv-01710-N Document 10-6 Filed 10/05/21 Page 2 of 8 PageID 308

Case 22-03052-sgj Doc 10-6 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 6 Page 2 of 8

000339

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 81 of 208 PageID 409
 - 2 - 

Part 2: Identify the subject of this appeal 

1. Describe the judgment, order, or decree appealed from: 

The Bankruptcy Court’s Order (I) Confirming the Fifth Amended Plan of Reorganization 

of Highland Capital Management, L.P. (as Modified) and (II) Granting Related Relief 

[Dkt. No. 1943] 

2. State the date on which the judgment, order, or decree was entered: February 22, 2021 

Part 3: Identify the other parties to the appeal 

List the names of all parties to the judgment, order, or decree appealed from and the names, 

addresses, and telephone numbers of their attorneys: 

1. Debtor-Appellee

PACHULSKI STANG ZIEHL & JONES LLP 

Jeffrey N. Pomerantz 

Ira D. Kharasch 

jpomerantz@pszjlaw.com 

ikharasch@pszjlaw.com 

10100 Santa Monica Blvd, 13th Floor 

Los Angeles, CA 90067 

John A. Morris 

Gregory V. Demo 

Hayley R. Winograd 

jmorris@pszjlaw.com 

gdemo@pszjlaw.com 

hwinograd@pszjlaw.com 

780 Third Avenue, 34th Floor 

New York, NY 10017-2024 

HAYWARD & ASSOCIATES PLLC 

Melissa S. Hayward 

Zachery Z. Annable 

10501 N. Central Expressway, Suite 106 

Dallas, TX 75231 

MHayward@HaywardFirm.com 

zannable@haywardfirm.com 

Counsel for Highland Capital Management, 

L.P.

2. Creditor-Appellant

K&L GATES LLP 

Artoush Varshosaz (TX Bar No. 24066234) 

1717 Main Street, Suite 2800 

Dallas, TX 75201 

Tel: (214) 939-5659 

artoush.varshosaz@klgates.com 

A. Lee Hogewood, III (pro hac vice) 

4350 Lassiter at North Hills Ave., Suite 300 

Raleigh, NC 27609 

Tel: (919) 743-7306 

Lee.hogewood@klgates.com 

Counsel for Highland Income Fund, NexPoint 

Strategic Opportunities Fund, Highland 

Global Allocation Fund, and NexPoint Capital, 

Inc.

Case 19-34054-sgj11 Doc 1986 Filed 03/08/21 Entered 03/08/21 06:14:10 Page 2 of 3

Appx. 0255

Case 3:21-cv-01710-N Document 10-6 Filed 10/05/21 Page 3 of 8 PageID 309

Case 22-03052-sgj Doc 10-6 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 6 Page 3 of 8

000340

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 82 of 208 PageID 410
 - 3 - 

Part 4: Optional election to have appeal heard by District Court

N/A 

Part 5: Sign below

Dated: March 3, 2021 

K&L GATES LLP 

/s/ A. Lee Hogewood, III 

A. Lee Hogewood, III (pro hac vice) 

4350 Lassiter at North Hills Ave., Suite 300 

Raleigh, NC 27609 

Telephone: (919) 743-7306 

 E-mail: lee.hogewood@klgates.com 

 Artoush Varshosaz (TX Bar No. 24066234)

 1717 Main Street, Suite 2800

 Dallas, TX 75201

 Telephone: (214) 939-5659

 E-mail: artoush.varshosaz@klgates.com 

Counsel for Highland Income Fund, NexPoint 

Strategic Opportunities Fund, Highland Global 

Allocation Fund, and NexPoint Capital, Inc.

Case 19-34054-sgj11 Doc 1986 Filed 03/08/21 Entered 03/08/21 06:14:10 Page 3 of 3

Appx. 0256

Case 3:21-cv-01710-N Document 10-6 Filed 10/05/21 Page 4 of 8 PageID 310

Case 22-03052-sgj Doc 10-6 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 6 Page 4 of 8

000341

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 83 of 208 PageID 411
BTXN 116 (rev. 07/08)

UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF TEXAS

APPEAL SERVICE LIST

Transmission of the Record

BK Case No.: 19í34054ísgj11 

Received in District Court by: 

Date: 

Volume Number(s): 

cc: Stacey G. Jernigan

Robert (Bob) Schaaf

Nathan (Nate) Elner

Attorney(s) for Appellant

US Trustee

Appellant Highland Income Fund, NexPoint Strategic Opportunities Fund, Highland Global Allocation Fund, and

NexPoint Capital, Inc.

K&L GATES LLP

Artoush Varshosaz

1717 Main Street, Suite 2800

Dallas, TX 75201

Telephone: (214) 939í5659

And

A. Lee Hogewood, III

4350 Lassiter at North Hills Ave., Suite 300

Raleigh, NC 27609

Telephone: (919) 743í7306

Appellee Highland Capital Management, L.P.

PACHULSKI STANG ZIEHL & JONES LLP

Jeffrey N. Pomerantz

Ira D. Kharasch

10100 Santa Monica Blvd, 13th Floor

Los Angeles, CA 90067

(No telephone number)

John A. Morris

Gregory V. Demo

Hayley R. Winograd

780 Third Avenue, 34th Floor

New York, NY 10017í2024

(No telephone number)

HAYWARD & ASSOCIATES PLLC

Melissa S. Hayward

Zachery Z. Annable

10501 N. Central Expressway, Suite 106

Case 19-34054-sgj11 Doc 1986-1 Filed 03/08/21 Entered 03/08/21 06:14:10 Page 1 of 4

Appx. 0257

Case 3:21-cv-01710-N Document 10-6 Filed 10/05/21 Page 5 of 8 PageID 311

Case 22-03052-sgj Doc 10-6 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 6 Page 5 of 8

000342

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 84 of 208 PageID 412
Dallas, TX 75231

(No telephone number)

Case 19-34054-sgj11 Doc 1986-1 Filed 03/08/21 Entered 03/08/21 06:14:10 Page 2 of 4

Appx. 0258

Case 3:21-cv-01710-N Document 10-6 Filed 10/05/21 Page 6 of 8 PageID 312

Case 22-03052-sgj Doc 10-6 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 6 Page 6 of 8

000343

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 85 of 208 PageID 413
Case 19-34054-sgj11 Doc 1986-1 Filed 03/08/21 Entered 03/08/21 06:14:10 Page 3 of 4

Appx. 0259

Case 3:21-cv-01710-N Document 10-6 Filed 10/05/21 Page 7 of 8 PageID 313

Case 22-03052-sgj Doc 10-6 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 6 Page 7 of 8

000344

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 86 of 208 PageID 414
Case 19-34054-sgj11 Doc 1986-1 Filed 03/08/21 Entered 03/08/21 06:14:10 Page 4 of 4

Appx. 0260

Case 3:21-cv-01710-N Document 10-6 Filed 10/05/21 Page 8 of 8 PageID 314

Case 22-03052-sgj Doc 10-6 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 6 Page 8 of 8

000345

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 87 of 208 PageID 415
EXHIBIT 

Appx. 0261

Case 3:21-cv-01710-N Document 10-7 Filed 10/05/21 Page 1 of 4 PageID 315

Case 22-03052-sgj Doc 10-7 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 7 Page 1 of 4

000346

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 88 of 208 PageID 416
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Case 19-34054-sgj11 Doc 1988 Filed 03/08/21 Entered 03/08/21 06:20:14 Page 1 of 164

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Case 3:21-cv-01710-N Document 10-7 Filed 10/05/21 Page 2 of 4 PageID 316

Case 22-03052-sgj Doc 10-7 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

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Case 19-34054-sgj11 Doc 1988 Filed 03/08/21 Entered 03/08/21 06:20:14 Page 2 of 164

Appx. 0263

Case 3:21-cv-01710-N Document 10-7 Filed 10/05/21 Page 3 of 4 PageID 317

Case 22-03052-sgj Doc 10-7 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

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Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 90 of 208 PageID 418
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Case 19-34054-sgj11 Doc 1988 Filed 03/08/21 Entered 03/08/21 06:20:14 Page 3 of 164

Appx. 0264

Case 3:21-cv-01710-N Document 10-7 Filed 10/05/21 Page 4 of 4 PageID 318

Case 22-03052-sgj Doc 10-7 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 7 Page 4 of 4

000349

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 91 of 208 PageID 419
EXHIBIT 

Appx. 0265

Case 3:21-cv-01710-N Document 10-8 Filed 10/05/21 Page 1 of 9 PageID 319

Case 22-03052-sgj Doc 10-8 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 8 Page 1 of 9

000350

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 92 of 208 PageID 420
{00375211-1} 

1 

Douglas S. Draper, La. Bar No. 5073 

ddraper@hellerdraper.com

Leslie A. Collins, La. Bar No. 14891 

lcollins@hellerdraper.com

Greta M. Brouphy, La. Bar No. 26216 

gbrouphy@hellerdraper.com

Heller, Draper & Horn, L.L.C. 

650 Poydras Street, Suite 2500 

New Orleans, LA 70130 

Telephone: (504) 299-3300 

Fax: (504) 299-3399 

Attorneys for The Dugaboy Investment Trust and Get Good Trust 

UNITED STATES BANKRUPTCY COURT FOR THE 

NORTHERN DISTRICT OF TEXAS 

DALLAS DIVISION 

IN RE: * Chapter 11 

 * 

* Case No. 19-34054sgj11 

HIGHLAND CAPITAL MANAGEMENT, L.P. * 

 * 

Debtor * 

NOTICE OF APPEAL AND STATEMENT OF ELECTION 

Part 1: Identify the appellant(s) 

1. Name(s) of appellant(s): ___ 

The Dugaboy Investment Trust and Get Good Trust 

2. Position of appellant(s) in the adversary proceeding or bankruptcy case that is the subject of 

this appeal: 

For appeals in an adversary proceeding. 

 Plaintiff 

 Defendant 

 Other (describe) 

________________________ 

For appeals in a bankruptcy case and not in an 

adversary proceeding. 

 Debtor 

X Creditor 

 Trustee 

 Other (describe) 

________________________ 

Part 2: Identify the subject of this appeal 

1. Describe the judgment, order, or decree appealed from: Order (I) Confirming the Fifth 

Amended Plan of Reorganization of Highland Capital Management, L.P. (As Modified) and (II) 

Granting Related Relief [Dkt. # 1943] 

Case 19-34054-sgj11 Doc 1992 Filed 03/08/21 Entered 03/08/21 06:28:13 Page 1 of 4

Appx. 0266

 ̈1¤}HV5#( $Z«

1934054210308000000000004

Docket #1992 Date Filed: 03/08/2021

Case 3:21-cv-01710-N Document 10-8 Filed 10/05/21 Page 2 of 9 PageID 320

Case 22-03052-sgj Doc 10-8 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 8 Page 2 of 9

000351

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 93 of 208 PageID 421
{00375211-1} 

2 

2. State the date on which the judgment, order, or decree was entered: February 22, 2021 

Part 3: Identify the other parties to the appeal 

List the names of all parties to the judgment, order, or decree appealed from and the names, 

addresses, and telephone numbers of their attorneys (attach additional pages if necessary): 

1. Party/Appellee: Debtor: Highland Capital Management, L.P. 

Attorney: 

PACHULSKI STANG ZIEHL & JONES LLP 

Jeffery N. Pomerantz 

Ira D. Kharasch 

John A. Morris 

Gregory V. Demo 

Hayley R. Winograd 

780 Third Avenue, 34th Floor 

New York, NY 10017-2024 

Telephone: (212) 561-7700 

Fax: (212) 561-7777 

And 

Hayward & Associates PLLC 

Melissa S. Hayward 

Zachery Z. Annable 

10501 N. Central Expy. Ste. 106 

Dallas, TX 75231 

Telephone: (972) 755-7100 

Fax: (972) 755-7110 

2. Party/Appellants: Highland Income Fund, NexPoint Strategic Opportunities Fund, Highland 

Global Allocation Fund, and NexPoint Capital, Inc. 

Attorney: 

K&L GATES LLP 

Artoush Varshosaz 

1717 Main Street, Suite 2800 

Dallas, TX 75201 

Telephone: (214) 939-5659 

Artoush.varshosaz@klgates.com 

And 

Case 19-34054-sgj11 Doc 1992 Filed 03/08/21 Entered 03/08/21 06:28:13 Page 2 of 4

Appx. 0267

Case 3:21-cv-01710-N Document 10-8 Filed 10/05/21 Page 3 of 9 PageID 321

Case 22-03052-sgj Doc 10-8 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 8 Page 3 of 9

000352

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 94 of 208 PageID 422
{00375211-1} 

3 

A. Lee Hogewood, III 

4350 Lassiter at North Hills Ave., Suite 300 

Raleigh, NC 27609 

Telephone: (919) 743-7306 

Lee.hogewood@klgates.com 

3. Party/Appellants: Highland Capital Management Fund Advisors, L.P. and NexPoint 

Advisors, L.P. 

Attorney: 

MUNSCH HARDT KOPF & HARR, P.C. 

Davor Rukavina 

Julian P. Vasek 

3800 Ross Tower 

500 N. Akard Street 

Dallas, TX 75201-6659 

Telephone: (214) 855-7587 

Facsimile: (214) 855-7584 

E-mail: drukavina@munsch.com 

4. Party/Appellants: The Dugaboy Investment Trust and Get Good Trust

Attorney: 

HELLER, DRAPER & HORN, L.L.C.

Douglas S. Draper 

Leslie A. Collins 

Greta M. Brouphy 

650 Poydras Street, Suite 2500 

New Orleans, LA 70130 

Telephone: (504) 299-3300 

Fax: (504) 299-3399 

5. Party/Appellants: James Dondero

Attorney: 

BONDS ELLIS EPPICH SCHAFER JONES LLP 

D. Michael Lynn 

John Y. Bonds 

Clay M. Taylor 

Bryan C. Assink 

420 Throckmorton Street, Ste. 1000 

Case 19-34054-sgj11 Doc 1992 Filed 03/08/21 Entered 03/08/21 06:28:13 Page 3 of 4

Appx. 0268

Case 3:21-cv-01710-N Document 10-8 Filed 10/05/21 Page 4 of 9 PageID 322

Case 22-03052-sgj Doc 10-8 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 8 Page 4 of 9

000353

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 95 of 208 PageID 423
{00375211-1} 

4 

Fort Worth, Texas 76102 

Telephone: (817) 405-6900 

Facsimile: (817) 405-6902 

Michael.lynn@bondsellis.com

john@bondsellis.com

clay.taylor@bondsellis.com

bryan.assink@bondsellis.com

Part 4: Optional election to have appeal heard by District Court (applicable only in 

certain districts) 

Not applicable. 

March 4, 2021 Respectfully submitted, 

/s/Douglas S. Draper. 

Douglas S. Draper, La. Bar No. 5073 

ddraper@hellerdraper.com 

Leslie A. Collins, La. Bar No. 14891 

lcollins@hellerdraper.com 

Greta M. Brouphy, La. Bar No. 26216 

gbrouphy@hellerdraper.com 

Heller, Draper & Horn, L.L.C. 

650 Poydras Street, Suite 2500 

New Orleans, LA 70130 

Telephone: (504) 299-3300 

Fax: (504) 299-3399 

Attorneys for The Dugaboy Investment Trust 

 and Get Good Trust

Case 19-34054-sgj11 Doc 1992 Filed 03/08/21 Entered 03/08/21 06:28:13 Page 4 of 4

Appx. 0269

Case 3:21-cv-01710-N Document 10-8 Filed 10/05/21 Page 5 of 9 PageID 323

Case 22-03052-sgj Doc 10-8 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 8 Page 5 of 9

000354

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 96 of 208 PageID 424
BTXN 116 (rev. 07/08)

UNITED STATES BANKRUPTCY COURT

NORTHERN DISTRICT OF TEXAS

APPEAL SERVICE LIST

Transmission of the Record

BK Case No.: 19í34054ísgj11 

Received in District Court by: 

Date: 

Volume Number(s): 

cc: Stacey G. Jernigan

Robert (Bob) Schaaf

Nathan (Nate) Elner

Attorney(s) for Appellant

US Trustee

Appellant : Highland Income Fund, NexPoint Strategic Opportunities Fund, Highland Global Allocation Fund, and

NexPoint Capital, Inc.

K&L GATES LLP

Artoush Varshosaz

1717 Main Street, Suite 2800

Dallas, TX 75201

Telephone: (214) 939í5659

And

A. Lee Hogewood, III

4350 Lassiter at North Hills Ave., Suite 300

Raleigh, NC 27609

Telephone: (919) 743í7306

Appellant Highland Capital Management Fund Advisors, L.P. and NexPoint Advisors, L.P.

MUNSCH HARDT KOPF & HARR, P.C.

Davor Rukavina

Julian P. Vasek

3800 Ross Tower

500 N. Akard Street

Dallas, TX 75201í6659

Telephone: (214) 855í7587

Appellant The Dugaboy Investment Trust and Get Good Trust

HELLER, DRAPER & HORN, L.L.C.

Douglas S. Draper

Leslie A. Collins

Greta M. Brouphy

650 Poydras Street, Suite 2500

New Orleans, LA 70130

Case 19-34054-sgj11 Doc 1992-1 Filed 03/08/21 Entered 03/08/21 06:28:13 Page 1 of 4

Appx. 0270

Case 3:21-cv-01710-N Document 10-8 Filed 10/05/21 Page 6 of 9 PageID 324

Case 22-03052-sgj Doc 10-8 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

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000355

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 97 of 208 PageID 425
Telephone: (504) 299í3300

Case 19-34054-sgj11 Doc 1992-1 Filed 03/08/21 Entered 03/08/21 06:28:13 Page 2 of 4

Appx. 0271

Case 3:21-cv-01710-N Document 10-8 Filed 10/05/21 Page 7 of 9 PageID 325

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000356

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 98 of 208 PageID 426
Appellant James Dondero

BONDS ELLIS EPPICH SCHAFER JONES LLP

D. Michael Lynn

John Y. Bonds

Clay M. Taylor

Bryan C. Assink

420 Throckmorton Street, Ste. 1000

Fort Worth, Texas 76102

Telephone: (817) 405í6900

Appellee Highland Capital Management, L.P.

PACHULSKI STANG ZIEHL & JONES LLP

Jeffery N. Pomerantz

Ira D. Kharasch

John A. Morris

Gregory V. Demo

Hayley R. Winograd

780 Third Avenue, 34th Floor

New York, NY 10017í2024

Telephone: (212) 561í7700

And

Hayward & Associates PLLC

Melissa S. Hayward

Zachery Z. Annable

10501 N. Central Expy. Ste. 106

Dallas, TX 75231

Telephone: (972) 755í7100

Case 19-34054-sgj11 Doc 1992-1 Filed 03/08/21 Entered 03/08/21 06:28:13 Page 3 of 4

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EXHIBIT 

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Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 136 of 208 PageID 464
1 

K&L GATES LLP 

Artoush Varshosaz (TX Bar No. 24066234) 

1717 Main Street, Suite 2800 

Dallas, TX 75201 

Telephone: (214) 939-5659 

E-mail: artoush.varshosaz@klgates.com 

A. Lee Hogewood, III (pro hac vice) 

4350 Lassiter at North Hills Ave., Suite 300 

Raleigh, NC 27609 

Telephone: (919) 743-7306 

E-mail: lee.hogewood@klgates.com 

Counsel for Highland Income Fund, NexPoint 

Strategic Opportunities Fund, Highland Global 

Allocation Fund, and NexPoint Capital, Inc.

IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE NORTHERN DISTRICT OF TEXAS 

DALLAS DIVISION 

 

 ) 

In re: ) Chapter 11 

 ) 

HIGHLAND CAPITAL MANAGEMENT, L.P. ) Case No. 19-34054 (SGJ11) 

 ) 

 Debtor. ) 

 ) 

 ) 

MOTION FOR STAY PENDING APPEAL OF THE COURT’S ORDER 

 CONFIRMING THE DEBTOR’S FIFTH AMENDED PLAN 

Highland Income Fund, NexPoint Strategic Opportunities Fund, Highland Global 

Allocation Fund, and NexPoint Capital, Inc. (each, a “Fund,” and collectively, the “Funds” or 

“Movants”), by and through their undersigned counsel, and pursuant to Rule 8007 of the Federal 

Rules of Bankruptcy Procedure, respectfully move (the “Motion”) this Court to stay its Order (I) 

Confirming the Fifth Amended Plan of Reorganization of Highland Capital Management, L.P. (as 

Modified) and (II) Granting Related Relief [Dkt. No. 1943] (the “Confirmation Order”) pending 

appeal. In support of the Motion, the Movants respectfully show the Court as follows: 

I. PRELIMINARY STATEMENT 

Case 19-34054-sgj11 Doc 1967 Filed 03/03/21 Entered 03/03/21 14:43:05 Page 1 of 20

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 ̈1¤}HV5## &N«

1934054210303000000000006

Docket #1967 Date Filed: 03/03/2021

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Exhibit 10 Page 2 of 21

000395

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 137 of 208 PageID 465
2 

1. On February 22, 2021, this Court entered its Confirmation Order in the abovecaptioned chapter 11 case of Highland Capital Management, L.P. (the “Debtor”). On March 3, 

2021, Movants timely filed a notice of appeal pursuant to Bankruptcy Rule 8002. Movants 

maintain that the Confirmation Order contravenes established law in the Fifth Circuit by 

confirming a plan that contains non-consensual non-debtor exculpation and injunction provisions 

that are overly broad. Further, the Confirmation Order approves a channeling injunction that 

impermissibly attempts to confer jurisdiction in the Court over post-confirmation matters with 

respect to which it would otherwise lack subject matter jurisdiction. The aforementioned 

provisions, which are now part of a confirmed plan, are sweeping and unprecedented. 

2. Accordingly, Movants respectfully request a stay pending appeal of the 

Confirmation Order. If a stay is not granted, Movants’ rights would be severely prejudiced 

pending the ruling on appeal, even if the ruling on appeal ultimately results in Movants’ favor. 

There is a present threat that the exculpation and injunction provisions preclude Movants from 

being able to exercise their contractual rights under certain management contracts with 

collateralized loan obligations (the “CLOs”) that are assumed under the confirmed plan. 

Moreover, Movants’ rights could be mooted by the time of any final resolution on appeal because 

by that time, the Debtor may have already completed its liquidation and wind down of the CLOs’ 

assets. A stay pending appeal does not present any serious risk of harm to the Debtor or its 

creditors. Furthermore, the public interest supports a stay pending appeal by ensuring that the 

Debtor and non-debtor parties are held responsible for their performance and compliance under 

contracts the Debtor has assumed, including the CLO management contracts. Accordingly, and as 

required by Bankruptcy Rule 8007, Movants, with all due respect, move this Court for a stay of its 

own Confirmation Order. 

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000396

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3 

II. BACKGROUND 

A. General Background on the Funds 

3. Each of the Funds is a publicly registered investment company or business 

development company under the Investment Company Act of 1940, as amended, 15 U.S.C. § 80a1, et. seq. (the “1940 Act”). Each of the Funds is regulated by the U.S. Securities and Exchange 

Commission (the “SEC”) and by a comprehensive set of securities laws, including the Securities 

Act of 1933, the Securities Exchange Act of 1934, and the 1940 Act, in addition to various state 

law provisions (collectively, the “Securities Laws”). Collectively, the Funds have thousands of 

shareholders, ranging from large institutional investors to small individual shareholders, and have 

more than $1 billion in assets under management. 

4. Each Fund is advised by either Highland Capital Management Fund Advisors, L.P., 

or NexPoint Advisors, L.P. (each, an “Advisor,” and collectively, the “Advisors”). The Advisors 

are investment advisers registered with the SEC as investment advisers under the Investment 

Advisers Act of 1940, as amended, 15 U.S.C. § 80b-1, et seq. (the “Advisers Act”). 

5. As public registered investment companies and a business development company, 

each Fund is regulated under the 1940 Act and is governed by a Board of Trustees (a “Board”). 

Each Board owes fiduciary duties to its Funds and to the Funds’ shareholders. The Boards also 

have obligations under the Securities Laws to exercise independent business judgment and act in 

the best interests of the Funds and their shareholders. 

6. The Boards have regular quarterly meetings, and frequently meet in between the 

quarterly meetings regarding a variety of Fund operational issues. The SEC routinely describes 

and emphasizes the oversight duties of investment company boards in its rulemaking efforts. The 

Boards’ members include a number of sophisticated investment professionals, all but one of whom 

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000397

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4 

is independent from the Advisors and who are advised by their own legal counsel. 

7. Additionally, the Funds do not have employees. Rather, the Boards retain the 

Advisors to advise the Funds, subject to the Boards’ oversight. 

8. The Funds also own the preference shares in certain CLOs for which the Debtor 

serves as portfolio manager, and own the majority of preference shares in at least three of such 

CLOs. The CLOs are securitization vehicles that were formed to acquire and hold pools of debt 

obligations. They also issued various tranches of notes and preference shares, which are intended 

to be repaid from proceeds of the subject CLO’s pool of debt obligations. The notes issued by the 

CLOs are paid according to a contractual priority of payments, with the value remaining in the 

CLOs after the notes are fully paid flowing to the holders of the preference shares. 

9. The CLO management agreements generally allow the holders of preference shares, 

i.e., the Funds, to remove the portfolio manager for cause, and some allow removal without cause. 

B. The Confirmation Order 

10. On October 16, 2019 (the “Petition Date”), the Debtor filed a voluntary petition 

under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”), commencing the 

above-captioned bankruptcy case. 

11. On November 24, 2020, the Debtor filed its Fifth Amended Plan of Reorganization 

of Highland Capital Management, L.P. [Dkt. No. 1472] (the “Fifth Amended Plan”). 

12. Movants, among other parties in interest, filed an objection to the Fifth Amended 

Plan. See, e.g., Dkt. No. 1670. 

13. On January 22, 2021, the Debtor filed its Fifth Amended Plan of Reorganization of 

Highland Capital Management, L.P. (as Modified) [Dkt. No. 1808] (the “Plan”). 

14. Article IX of the Plan contains the following exculpation provision (the 

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000398

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 140 of 208 PageID 468
5 

“Exculpation Provision”):1

C. Exculpation 

Subject in all respects to ARTICLE XII.D of this Plan, to the maximum 

extent permitted by applicable law, no Exculpated Party will have or incur, and 

each Exculpated Party is hereby exculpated from, any claim, obligation, suit, 

judgment, damage, demand, debt, right, Cause of Action, remedy, loss, and liability 

for conduct occurring on or after the Petition Date in connection with or arising out 

of (i) the filing and administration of the Chapter 11 Case; (ii) the negotiation and 

pursuit of the Disclosure Statement, the Plan, or the solicitation of votes for, or 

confirmation of, the Plan; (iii) the funding or consummation of the Plan (including 

the Plan Supplement) or any related agreements, instruments, or other documents, 

the solicitation of votes on the Plan, the offer, issuance, and Plan Distribution of 

any securities issued or to be issued pursuant to the Plan, including the Claimant 

Trust Interests, whether or not such Plan Distributions occur following the Effective 

Date; (iv) the implementation of the Plan; and (v) any negotiations, transactions, 

and documentation in connection with the foregoing clauses (i)-(iv); provided, 

however, the foregoing will not apply to (a) any acts or omissions of an Exculpated 

Party arising out of or related to acts or omissions that constitute bad faith, fraud, 

gross negligence, criminal misconduct, or willful misconduct or (b) Strand or any 

Employee other than with respect to actions taken by such Entities from the date of 

appointment of the Independent Directors through the Effective Date. This 

exculpation shall be in addition to, and not in limitation of, all other releases, 

indemnities, exculpations, any other applicable law or rules, or any other provisions 

of this Plan, including ARTICLE IV.C.2, protecting such Exculpated Parties from 

liability. 

Dkt. No. 1808 at 54-55. “Exculpated Parties,” in turn, means, collectively: 

(i) the Debtor and its successors and assigns, direct and indirect majority-owned 

subsidiaries, and the Managed Funds,2

 (ii) the Employees, (iii) Strand, (iv) the 

Independent Directors, (v) the Committee, (vi) the members of the Committee (in 

their official capacities), (vii) the Professionals retained by the Debtor and the 

Committee in the Chapter 11 Case, (viii) the CEO/CRO; and (ix) the Related 

Persons of each of the parties listed in (iv) through (viii); provided, however, that, 

for the avoidance of doubt, none of James Dondero, Mark Okada, NexPoint 

Advisors, L.P. (and any of its subsidiaries and managed entities), the Charitable 

Donor Advised Fund, L.P. (and any of its subsidiaries, including CLO Holdco, Ltd., 

and managed entities), Highland CLO Funding, Ltd. (and any of its subsidiaries, 

members, and managed entities), Highland Capital Management Fund Advisors, 

L.P. (and any of its subsidiaries and managed entities), NexBank, SSB (and any of 

 

1

 Capitalized terms used, but not otherwise defined, shall have the meanings ascribed to such terms in the Plan. 

2

 To avoid any confusion, Movants note that the Plan defines the Managed Funds as “Highland Multi-Strategy Credit 

Fund, L.P., Highland Restoration Capital Partners, L.P., and any other investment vehicle managed by the Debtor 

pursuant to an Executory Contract assumed pursuant to this Plan.” Dkt. No. 1808 at 17. 

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000399

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 141 of 208 PageID 469
6 

its subsidiaries), the Hunter Mountain Investment Trust (or any trustee acting for 

the trust), the Dugaboy Investment Trust (or any trustee acting for the trust), or 

Grant Scott is included in the term “Exculpated Party.” 

Dkt. No. 1808 at 15. 

15. Article IX of the Plan also contains an injunction provision (the “Injunction”), 

which provides, in pertinent part, as follows: 

F. Injunction 

Upon entry of the Confirmation Order, all Enjoined Parties are and shall be 

permanently enjoined, on and after the Effective Date, from taking any actions to 

interfere with the implementation or consummation of the Plan. 

. . . . 

Subject in all respects to ARTICLE XII.D, no Enjoined Party may 

commence or pursue a claim or cause of action of any kind against any Protected 

Party that arose or arises from or is related to the Chapter 11 Case, the negotiation 

of the Plan, the administration of the Plan or property to be distributed under the 

Plan, the wind down of the business of the Debtor or Reorganized Debtor, the 

administration of the Claimant Trust or the Litigation Sub-Trust, or the transactions 

in furtherance of the foregoing without the Bankruptcy Court (i) first determining, 

after notice and a hearing, that such claim or cause of action represents a colorable 

claim of any kind, including, but not limited to, negligence, bad faith, criminal 

misconduct, willful misconduct, fraud, or gross negligence against a Protected 

Party and (ii) specifically authorizing such Enjoined Party to bring such claim or 

cause of action against any such Protected Party; provided, however, the foregoing 

will not apply to a claim or cause of action against Strand or against any Employee 

other than with respect to actions taken, respectively, by Strand or by such 

Employee from the date of appointment of the Independent Directors through the 

Effective Date. The Bankruptcy Court will have sole and exclusive jurisdiction to 

determine whether a claim or cause of action is colorable and, only to the extent 

legally permissible and as provided for in ARTICLE XI, shall have jurisdiction to 

adjudicate the underlying colorable claim or cause of action. 

Dkt. No. 1808 at 57-58. “Enjoined Parties,” in turn, is defined to mean: 

(i) all Entities who have held, hold, or may hold Claims against or Equity Interests 

in the Debtor (whether or not proof of such Claims or Equity Interests has been 

filed and whether or not such Entities vote in favor of, against or abstain from voting 

on the Plan or are presumed to have accepted or deemed to have rejected the Plan), 

(ii) James Dondero (“Dondero”), (iii) any Entity that has appeared and/or filed any 

motion, objection, or other pleading in this Chapter 11 Case regardless of the 

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000400

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 142 of 208 PageID 470
7 

capacity in which such Entity appeared and any other party in interest, (iv) any 

Related Entity, and (v) the Related Persons of each of the foregoing. 

Dkt. No. 1808 at 14. “Protected Parties” means, collectively: 

(i) the Debtor and its successors and assigns, direct and indirect majority-owned 

subsidiaries, and the Managed Funds, (ii) the Employees, (iii) Strand, (iv) the 

Reorganized Debtor, (v) the Independent Directors, (vi) the Committee, (vii) the 

members of the Committee (in their official capacities), (viii) the Claimant Trust, 

(ix) the Claimant Trustee, (x) the Litigation Sub-Trust, (xi) the Litigation Trustee, 

(xii) the members of the Claimant Trust Oversight Committee (in their official 

capacities), (xiii) New GP LLC, (xiv) the Professionals retained by the Debtor and 

the Committee in the Chapter 11 Case, (xv) the CEO/CRO; and (xvi) the Related 

Persons of each of the parties listed in (iv) through (xv); provided, however, that, 

for the avoidance of doubt, none of James Dondero, Mark Okada, NexPoint 

Advisors, L.P. (and any of its subsidiaries and managed entities), the Charitable 

Donor Advised Fund, L.P. (and any of its subsidiaries, including CLO Holdco, Ltd., 

and managed entities), Highland CLO Funding, Ltd. (and any of its subsidiaries, 

members, and managed entities), NexBank, SSB (and any of its subsidiaries), 

Highland Capital Management Fund Advisors, L.P. (and any of its subsidiaries and 

managed entities), the Hunter Mountain Investment Trust (or any trustee acting for 

the trust), the Dugaboy Investment Trust (or any trustee acting for the trust), or 

Grant Scott is included in the term “Protected Party.” 

Dkt. No. 1808 at 19. 

16. On February 2 and 3, 2021, the Court conducted a hearing on confirmation of the 

Plan, and on February 22, 2021, entered the Confirmation Order. 

17. Movants timely appealed the Confirmation Order by filing a Notice of Appeal on 

March 3, 2021 [Dkt. No. 1966]. 

III. ARGUMENTS AND AUTHORITIES 

A. Standard for a Stay Pending Appeal 

18. By the Motion, Movants request a stay of the Confirmation Order pending appeal 

pursuant to Bankruptcy Rule 8007. 

19. Bankruptcy Rule 8007 allows a bankruptcy court to stay a judgment in order to 

maintain the status quo pending appeal. Fed. R. Bankr. P. 8007(a)(1)(A). 

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20. The decision of whether to grant a stay pending appeal under Bankruptcy Rule 8007 

is a matter within the court’s discretion. In re Dye, Case No. 06-71024, 2007 Bankr. LEXIS 2972, 

at *3 (Bankr. N.D. Ga. July 24, 2007) (discussing former Bankruptcy Rule 8005). “That discretion 

is by design a flexible tool which permits the bankruptcy court to tailor relief to the circumstances 

of the particular case.” Id. (citing Gleasman v. Jones, Day, Reavis & Pogue, 111 B.R. 595 (Bankr. 

W.D. Tex. 1990)). 

21. In determining whether to grant a discretionary stay pending appeal under 

Bankruptcy Rule 8007, courts consider the following criteria: 

(1) the likelihood that the movant will prevail on the merits of the appeal; 

(2) whether the movant will suffer irreparable injury if the stay is denied; 

(3) whether other parties would suffer substantial harmed if the stay is granted; and 

(4) whether the public interest will be served by granting the stay. 

In re First S. Sav. Ass’n, 820 F.2d 700, 709 (5th Cir. 1987); In re Tex. Equip. Co., 283 B.R. 222, 

226-27 (Bankr. N.D. Tex. 2002). In the Fifth Circuit, each of the foregoing criteria must be 

satisfied by the party requesting the stay. In re Tex. Equip. Co., 283 B.R. at 227; see also In re 

Dernick, Case No. 18-32417, 2019 WL 236999, at *2 (Bankr. S.D. Tex. Jan. 16, 2019) (movants 

must prove entitlement to relief by a preponderance of the evidence). However, the first two 

elements are the most critical. Saldana v. Saldana, 2015 WL 502145, at *2 (N.D. Tex. Aug. 25, 

2015). 

22. The nature of an order confirming a plan of reorganization makes a stay pending 

appeal uniquely important. Without a stay of such an order, “it is extremely unlikely that 

Appellants will ever be able to have meaningful appellate review of the rulings of the Bankruptcy 

Court, a non-Article III court, and in any event, a lower court. The ability to review decisions of 

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the lower courts is the guarantee of accountability in our judicial system. . . . Thus, the ability to 

appeal a lower court ruling is a substantial and important right.” In re Adelphia Commc’ns Corp., 

361 B.R. 337, 342 (S.D.N.Y. 2007). 

23. As discussed herein, a stay of the Confirmation Order is justified. 

B. There is a Likelihood of Success on the Merits 

24. With respect to the first factor, the U.S. Court of Appeals for the Fifth Circuit has 

recognized that a movant must either present a prima facie case, but need not show that it is certain 

to win, or, if a serious legal question is involved, must present a substantial case on the merits and 

show that the balance of equities weighs heavily in favor of granting the stay. In re First S. Sav., 

820 F.2d at 704; In re Dernick, 2019 WL 236999, at *2; In re Tex. Equip. Co., 283 B.R. at 227. 

The standards provided by substantive law guide the court in determining whether a movant has 

shown a likelihood of success on the merits. In re Dernick, 2019 WL 236999, at *2. 

25. Where an appeal involves questions of law, “the movant more easily satisfies the 

first element.” In re Tex. Equip. Co., 283 B.R. at 227. With respect to confirmation of a chapter 

11 plan, the bankruptcy court’s conclusions of law are reviewed de novo. See In re Tex. Grand 

Prairie Hotel Realty LLC, 710 F.3d 324, 326 n.1 (5th Cir. 2013). The Movants’ appeal relates to 

the Exculpation Provision and the Injunction, which are legal issues that will be subject to de novo 

review. 

26. The Movants have shown a likelihood of success on the merits. The Exculpation 

Provision and Injunction provided for in the Plan contravene established law. The Fifth Circuit 

has held that exculpation provisions designed to absolve parties other than the debtor and the 

creditors’ committee of any negligent conduct that occurred during the course of the bankruptcy 

are unenforceable. In re Pac. Lumber Co., 584 F.3d 229, 253 (5th Cir. 2009). To the contrary, 

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Fifth Circuit authorities broadly “foreclose non-consensual non-debtor releases and permanent 

injunctions.” Id. at 252 (citing authorities); see also Dropbox, Inc. v. Thru, Inc. (In re Thru, Inc.), 

Civil Action No. 3:17-CV-1958-G, 2018 WL 5113124, at *22-23 (N.D. Tex. Oct. 19, 2018). 

Whereas exculpation of the debtor is justified by section 524 of the Bankruptcy Code, and 

exculpation of creditors’ committees has been deemed justified by section 1103 of the Bankruptcy 

Code, there is no authority justifying an extension of exculpation protections to other parties, even 

if the parties sought to be exculpated participated significantly in formulating the confirmed plan. 

In re Pac. Lumber, 584 F.3d at 253 (noting that the creditors’ committee and its members were 

“the only disinterested volunteers among the parties sought to be released”); see also In re 

Pilgrim’s Pride Corp., Case No. 08-45664, 2010 WL 200000, at *5 (Bankr. N.D. Tex. Jan. 14, 

2010) (“Because Pacific Lumber is binding precedent, the court may not, over objection, approve 

through confirmation of the Plan third-party protections, other than those provided to the 

Committees, members of the Committees, and the Committees’ Professionals.”). 

27. However, the Plan extends the Exculpation Provision to not only the Debtor, the 

creditors’ committee, and their professionals, but also, impermissibly, to the Debtor’s majorityowned subsidiaries, the Managed Funds, Employees, Strand, the Independent Directors, the 

CEO/CRO, and other Related Persons, in contravention of established precedent. Such parties are 

not “disinterested volunteers” akin to the creditors’ committee, and even if they were, Fifth Circuit 

precedent does not support their exculpation from liability. 

28. Furthermore, there is no clear end date with respect to the Exculpation Provision. 

The Exculpation Provision has the practical effect of allowing the Exculpated Parties to escape 

liability for post-confirmation conduct that goes beyond activity relating to the bankruptcy case, 

formulation of the Plan, or the administration of the estate, and allows the Exculpated Parties to 

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escape liability that may arise in ordinary course, post-petition relationships of the parties, such as 

liability for an ordinary breach of contract. 

29. Indeed, the district court, in In re Thru, Inc., struck down a virtually identical 

exculpation clause as the one in the Plan. 2018 WL 5113124, at *22-23. The exculpation clause 

in that case provided as follows: 

Neither the Debtor nor any of its present officers, directors, employees, agents, 

advisors, or affiliates, nor any of its Professionals (collectively, the “Exculpated 

Persons”), shall have or incur any liability to any Entity for any act taken or 

omission made in good faith in connection with or related to formulating, 

negotiating, implementing, confirming or consummating the Plan, the Disclosure 

Statement or any Plan Document. The Exculpated Persons shall have no liability 

to the Debtor, any Creditor, Interest holder, any other party in interest in the Chapter 

11 Case or any other Entity for actions taken or not taken under the Plan, in 

connection herewith or with respect thereto, or arising out of their administration 

of the Plan or the property to be distributed under the Plan, in good faith, including 

failure to obtain Confirmation or to satisfy any condition or conditions, or refusal 

to waive any condition or conditions, to the occurrence of the Effective Date, and 

in all respects such Exculpated Persons shall be entitled to rely upon the advice of 

counsel with respect to their duties and responsibilities under the Plan. 

Id. at *22. 

30. Because the district court has already concluded that confirmation of a plan 

containing a virtually identical exculpation provision constituted clear error, the Movants have 

demonstrated a likelihood of success on the merits of their appeal. Here, the Exculpation Provision 

is even broader than the one at issue in In re Thru, as it protects non-debtor entities and their 

directors, is not limited to bankruptcy administration matters, and is not limited in time to the preEffective Date period. 

31. Moreover, the Court’s stated reasons for allowing the Exculpation Provision, as 

expressed in the Confirmation Order, on their face do not apply to many of the Exculpated Parties. 

The Court found that dicta in Pacific Lumber that “costs the released parties might incur defending 

against suits alleging such negligence are unlikely to swamp either these parties or the 

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consummated reorganization” hinted that the equities and/or economics of a case might justify a 

non-debtor exculpation provision. While Movants concede it is possible that litigation against 

some of the Exculpated Parties, such as the Debtor, the Independent Directors, the CEO/CRO, and 

even the Employees, could hamper reorganization efforts, there is no foreseeable or expressed 

concern that litigation against other Exculpated Parties, such as the Debtor’s owned subsidiaries 

and Managed Funds, or the Related Persons, would have any impact on reorganization efforts. 

The Court also found that the Independent Directors, and by extension the CEO/CRO, fell within 

a policy-based exclusion as being akin to a creditors’ committee or its members, but the 

Independent Directors and the CEO/CRO are only one subset of the Exculpated Parties. The Court 

made no finding that exculpation of any of the other Exculpated Parties could be justified under 

this rationale. Finally, again only with respect to the Independent Directors, the Court found that 

they were already exculpated by virtue of its January 9, 2020 order at Docket No. 339. 

Accordingly, even if there is a basis in law for extending exculpation protections to certain of the 

Exculpated Parties, namely the Independent Directors and the CEO/CRO, there is no stated or 

implied basis for allowing the Exculpation Provision with respect to any of the other Exculpated 

Parties.3

32. Furthermore, the sweeping Injunction preventing parties from pursuing causes of 

action against the non-debtor Protected Parties effectively discharges non-debtors and contravenes 

 

3

 It is also worth noting that the breadth of the Exculpation Provision does serve to discharge non-debtors in 

contravention of section 524 of the Bankruptcy Code. Under section 1141(d) of the Bankruptcy Code, confirmation 

of a plan discharges the debtor from any debt “that arose before the date of such confirmation.” 11 U.S.C. § 

1141(d)(1). Section 524 simply provides the effect of a discharge granted under another chapter of the Bankruptcy 

Code. Thus, to the extent that the Exculpation Provision exculpates non-debtor parties from claims arising prior to 

the date of confirmation, it has the effect of granting a discharge to such parties. With this understanding in mind, the 

Fifth Circuit’s bar on exculpation provisions with respect to non-debtor third parties that are not co-liable with the 

debtor avoids conflict between sections 524(e) and 1141(d)(1) of the Bankruptcy Code. Movants submit that the 

decision of the U.S. Court of Appeals for the Ninth Circuit, cited favorably by the Court in its oral ruling, misses this 

point. 

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established Fifth Circuit precedent. The Injunction is significantly broader than injunctions that 

have been struck down by courts in the Fifth Circuit. In the recent case of In re Thru, Inc., the 

district court struck down an injunction that purported to enjoin causes of action held against the 

debtor or the estate and that arose prior to the effective date of the plan from being brought against 

certain non-debtor protected parties. 2018 WL 5113124, at *21-22. The district court found that 

it was clearly erroneous for the bankruptcy court to approve the injunction, which the bankruptcy 

court approved under section 105 of the Bankruptcy Code, because it effectively discharged nondebtors. Id. The Injunction in the Plan is broader than the injunction at issue in In re Thru in 

several important respects, as the Plan Injunction is not limited to claims that arose prior to the 

Effective Date, and is not limited to claims that the Enjoined Parties hold against the Debtor. 

Rather, the Injunction appears to have no end date, so long as a claim or cause of action arises out 

of some future administration or implementation of the Plan. Moreover, and significantly, the 

Injunction precludes Enjoined Parties from bringing claims held against the Protected Parties -- 

not just claims held against the Debtor or the estate. See also In re Pilgrim’s Pride, 2010 WL 

200000, at *5 n.14 (Pacific Lumber prohibits exculpatory language that would bar outright actions 

against the debtor’s management and professionals for their actions taken during a chapter 11 

case). 

33. The propriety of the Injunction is not saved by the ability of an Enjoined Party to 

bring such claim if the Court so allows. In fact, the channeling nature of the Injunction is 

impermissible as well. As drafted, the Injunction is broad enough to cover claims and causes of 

action that arise out of post-confirmation, ordinary course transactions between the Reorganized 

Debtor and/or non-debtor parties and other parties in interest and which do not have any actual 

relationship to the Plan or its implementation. The Court lacks subject matter jurisdiction over the 

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breadth of actions covered by the Injunction. See In re CJ Holding Co., 597 B.R. 597, 604 (S.D. 

Tex. 2019) (“After confirmation, ‘the debtor’s estate, and thus bankruptcy jurisdiction, ceases to 

exist, other than for matters pertaining to the implementation or execution of the plan.’”) (quoting 

In re Galaz, 841 F.3d 316, 322 (5th Cir. 2016)); see also In re Pilgrim’s Pride, 2010 WL 200000, 

at *5, n.14 (bankruptcy court could retain limited jurisdiction to channel claims against the debtors’ 

management and professionals stemming from their conduct during the chapter 11 cases, but 

Pacific Lumber prohibits exculpatory language that would bar such claims outright). Therefore, 

the channeling Injunction is impermissible because the Court appears to lack jurisdiction to even 

consider whether an enjoined action is colorable. The channeling Injunction goes far beyond what 

the Court has jurisdiction to channel to itself. Parties cannot create indefinite subject matter 

jurisdiction where none otherwise exists. 

34. Furthermore, the Court’s justification of the gatekeeping Injunction is based 

primarily on the litigiousness of Dondero and his controlled entities. However, this justification 

does not extend to the Funds, which are controlled by independent boards, as discussed above, and 

are wholly independent of Dondero. This reality reflects why the gatekeeping Injunction is overly 

broad, as it serves to prevent innocent third parties from exercising their legal rights. 

35. Accordingly, to the extent that the Confirmation Order authorizes the Exculpation 

Provision and the Injunction, it does so based upon an erroneous interpretation of the law and is 

an abuse of discretion. In re Tex. Equip. Co., 283 B.R. at 227. 

36. Second, this element is also satisfied because the Confirmation Order, to the extent 

it approves the Exculpation Provision and the Injunction, presents a serious legal question. At a 

minimum, Movants have shown a substantial case on the merits and the balance of equities weigh 

heavily in favor of a stay. See In re First S. Sav., 820 F.2d at 704; In re Dernick, 2019 WL 236999, 

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at *3; In re Tex. Equip. Co., 283 B.R. at 227. “A serious legal question exists when legal issues 

have far-reaching effects, involve significant public concerns, or have a broad impact on 

federal/state relations.” In re Dernick, 2019 WL 236999, at *3; see In re Westwood Plaza 

Apartments, Ltd., 150 B.R. 163, 168 (Bankr. E.D. Tex. 1993) (serious legal question existed with 

respect to the appropriate standard for determining the market rate of interest in a cramdown plan, 

even though no likelihood of success on the merits). Here, the Exculpation Provision and the 

Injunction violate established Fifth Circuit precedent, and the Confirmation Order’s approval of 

such provisions is clearly erroneous. Upholding judicial precedent is a significant public interest, 

and the allowance of these provisions will cause lasting effects on parties in interest. Indeed, the 

Injunction is so broad that it will prevent parties, such as the Movants, from enforcing their rights 

with respect to post-confirmation transactions unrelated to the bankruptcy case unless they first 

seek authority to do so from the Court. Not only does this prevent a significant hurdle to the 

enforcement of rights, but it presents a serious due process concern. 

37. Accordingly, it is likely that the Confirmation Order will be reversed to the extent 

it allows the Exculpation Provision and the Injunction. At the very least, the validity of the 

Exculpation Provision and the Injunction presents serious legal issues, Movants have presented a 

substantial case on the merits, and as discussed herein, the balance of equities weigh in favor of 

issuing a stay. 

C. Movants will Suffer Irreparable Injury without a Stay 

38. The second factor concerns whether the moving party will suffer irreparable injury 

if the stay is denied because it will effectively be denied appellate review due to mootness or 

similar considerations. In re Tex. Equip. Co., 283 B.R. at 228. This factor also warrants a stay of 

the Confirmation Order. 

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39. Consummation of a plan may render any challenges to confirmation thereof moot. 

In re Westwood Plaza Apartments, 150 B.R. at 169 (factor tilted in favor of granting stay); In re 

Thru, Inc., 2018 WL 5113124, at *12 (equitable mootness more likely if no stay has been obtained 

and plan has been substantially consummated); see also In re Best Products Co., 177 B.R. 791 

(S.D.N.Y. 1995) (dismissing appeal of confirmation order as moot where appellant failed to seek 

stay of confirmation order and plan had been consummated). Indeed, the Fifth Circuit in In re 

Pacific Lumber Co., 584 F.3d 229 (5th Cir. 2009), recognized the potential issues with denying a 

stay of a confirmation order pending appeal: 

Although the exigencies of the case appeared to demand prompt action, simply 

denying a stay seems to have been, and often will be, too simplistic a response. A 

plan may be designed to take effect, as it was here, after a lapse of sufficient time 

to initiate appellate review. A supersedeas bond may be tailored to the scope of the 

appeal. An appeal may be expedited. As with all facets of bankruptcy practice, 

myriad possibilities exist. Thus, substantial legal issues can and ought to be 

preserved for review. 

584 F.3d at 243. 

40. The unprecedented breadth of the Exculpation Provision and the Injunction has the 

potential to cause immediate and irreparable harm to the Movants and other parties in interest. 

These provisions have the cumulative effect of preventing Movants, among other parties, from 

exercising their legal rights to pursue any claims or causes of action, however distantly related to 

the bankruptcy case. Indeed, the provisions are so broad that they would prevent Movants from 

exercising their contractual rights and remedies that arise post-confirmation in the ordinary course 

of business under the CLO management agreements, and insulate the Debtor as well as non-debtor 

parties from any corresponding liability, despite the same being completely distinct from the 

bankruptcy case, and notwithstanding the basis or nature of the claim. In effect, even if the Debtor 

were to engage in conduct post-confirmation that presented a basis for the Movants to remove the 

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Debtor as manager under the CLO management agreements, they would be prevented from doing 

so. The Exculpation Provision and the Injunction impermissibly shields the Debtor and non-debtor 

parties from liability for post-petition and post-confirmation breaches of contract. 

41. In practical effect, Movants will, at the very least, have to seek leave of the Court 

in order to seek any relief for any present or future actionable wrongs, whether contractual or under 

applicable non-bankruptcy law. However, the Court will not have jurisdiction with respect to 

disputes that arise post-confirmation. It is thus foreseeable that the Court, without jurisdiction, 

could decide that a proposed claim is not colorable, preventing Movants from pursuing their 

contractual rights and remedies without review by a court of proper jurisdiction. At a minimum, 

the time it would take Movants to comply with the gatekeeping Injunction, during which time the 

Movants would be prevented from exercising their legitimate contractual rights, imposes a 

substantial burden. 

42. Clearly, if the stay is denied, Movants could suffer harm for which they have no 

legal redress and which becomes moot - equitably or otherwise - before a decision is rendered on 

appeal. 

43. The impermissibility of the Exculpation Provision and Injunction is apparent, and 

absent a stay, will immediately deprive Movants of their rights and ability to seek legal redress for 

wrongs that may be suffered. The possibility of irreparable injury can only be remedied by a stay 

of the Confirmation Order. 

D. No Substantial Harm to the Debtor or Other Parties 

44. A stay pending appeal is also justified under the third prong because neither the 

Debtor, nor any of the Debtor’s creditors, will be substantially harmed by a stay of the 

Confirmation Order pending appeal. Moreover, the Court can fashion the stay to prevent harm to 

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the Debtor and other parties. See In re Westwood Plaza Apartments, 150 B.R. at 169 (conditioning 

stay of plan on, among other things, debtor’s ability to pay administrative, tax and secured claims 

as provided for under the plan); In re Thru, 2018 WL 5113124, at *20 (recognizing availability of 

partial relief on appeal of plan with respect to exculpation provisions). 

45. Courts have found substantial harm to other parties if the stay would cause a 

significant delay in the administration of the estate or a delay in the distribution to creditors under 

the plan. In re Dernick, 2019 WL 236999, at *4. However, a stay of the Confirmation Order does 

not prevent the Debtor from continuing to operate as it has been doing during the bankruptcy case. 

Indeed, the Plan largely contemplates a continuation of the pre-confirmation business. The Debtor 

can thus continue administering the estate, as well as the CLOs and other managed funds. There 

are no asset sales or compromises under the Plan that depend upon it becoming effective, nor is 

there any contingent exit financing. Accordingly, staying the Confirmation Order will not hamper 

the reorganization. 

46. To the contrary, if the Confirmation Order is not stayed, parties in interest in the 

case would be significantly injured by the serious deprivation of their rights. 

47. A stay pending appeal is critical to preserve the status quo, which, in this instance 

involves preservation of the Movants’ legal rights and remedies, while important legal issues are 

determined by the appellate court. In re Tolco Props., Inc., 6 B.R. 490, 491 (Bankr. E.D. Va. 

1980) (“The Court is of the opinion that the purpose of a stay pending appeal is to maintain the 

status quo and to prevent harm to the moving party between the time the original order was entered 

and the decision to appeal.”). 

E. The Public Interest is Served by a Stay 

48. Because the Exculpation Provision and the Injunction impermissibly infringe upon 

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the contractual, legal and due process rights of parties in interest in the bankruptcy case, a stay 

pending appeal of the Confirmation Order will serve the public interest. A stay will ensure that 

the Debtor as well as non-debtor parties are held accountable for their post-petition and postconfirmation conduct, while preserving the rights and remedies of parties in interest under 

applicable non-bankruptcy law. Likewise, a stay will serve the public interest of respecting and 

upholding judicial precedent. 

49. Moreover, a stay will protect the interests of the Movants and other innocent third 

party investors that have collectively invested more than $1 billion in the CLOs that the Debtor 

manages. The Exculpation Provision and Injunction, if not stayed, may effectively and 

permanently prevent these parties from exercising legitimate contractual rights. 

50. The public interest will further be served by preserving the status quo among the 

parties while the propriety of the Exculpation and Injunction provisions is resolved by the appellate 

court. “The case law signals a preference in favor of maintaining the status quo.” Skinner v. SBA 

(In re Skinner), 202 B.R. 867, 869 (W.D. Va. 1996) (citing Feller v. Brock, 802 F.2d 722, 727 (4th 

Cir. 1986)). 

IV. CONCLUSION 

51. Based on the foregoing, a stay of the Confirmation Order is justified under each of 

the applicable factors for a stay pending appeal. Accordingly, the Court should grant a stay of the 

Confirmation Order with respect to such provisions pending appeal. 

WHEREFORE, Movants request that the Court enter an Order: 

1. Staying the Confirmation Order pending appeal; and 

2. Granting such other relief as is just and proper. 

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Exhibit 10 Page 20 of 21

000413

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 155 of 208 PageID 483
20 

Dated: March 3, 2021 

K&L Gates LLP 

/s/ A. Lee Hogewood, III 

A. Lee Hogewood, III (pro hac vice) 

4350 Lassiter at North Hills Ave., Suite 300 

Raleigh, NC 27609 

Telephone: (919) 743-7306 

 E-mail: lee.hogewood@klgates.com 

 Artoush Varshosaz (TX Bar No. 24066234)

 1717 Main Street, Suite 2800

 Dallas, TX 75201

 Telephone: (214) 939-5659

 E-mail: artoush.varshosaz@klgates.com 

 Counsel for Highland Income Fund, 

 NexPoint Strategic Opportunities Fund, 

 Highland Global Allocation Fund, and 

 NexPoint Capital, Inc. 

CERTIFICATE OF SERVICE 

I hereby certify that on March 3, 2021, I caused the foregoing document to be served via 

first class United States mail, postage prepaid and/or electronic email through the Court’s CM/ECF 

system to the parties that consented to such service. 

Dated: March 3, 2021 

 /s/ A. Lee Hogewood, III 

 A. Lee Hogewood, III 

Case 19-34054-sgj11 Doc 1967 Filed 03/03/21 Entered 03/03/21 14:43:05 Page 20 of 20

Appx. 0329

Case 3:21-cv-01710-N Document 10-10 Filed 10/05/21 Page 21 of 21 PageID 383

Case 22-03052-sgj Doc 10-10 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 10 Page 21 of 21

000414

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 156 of 208 PageID 484
EXHIBIT 

Appx. 0330

Case 3:21-cv-01710-N Document 10-11 Filed 10/05/21 Page 1 of 46 PageID 384

Case 22-03052-sgj Doc 10-11 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 11 Page 1 of 46

000415

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 157 of 208 PageID 485
{00375210-8} 

1 

Douglas S. Draper, La. Bar No. 5073 

ddraper@hellerdraper.com 

Leslie A. Collins, La. Bar No. 14891 

lcollins@hellerdraper.com 

Greta M. Brouphy, La. Bar No. 26216 

gbrouphy@hellerdraper.com 

Heller, Draper & Horn, L.L.C. 

650 Poydras Street, Suite 2500 

New Orleans, LA 70130 

Telephone: (504) 299-3300 

Fax: (504) 299-3399 

Attorneys for The Dugaboy Investment Trust and Get Good Trust 

UNITED STATES BANKRUPTCY COURT FOR THE 

NORTHERN DISTRICT OF TEXAS 

DALLAS DIVISION 

IN RE: * Chapter 11 

 * 

* Case No. 19-34054sgj11 

HIGHLAND CAPITAL MANAGEMENT, L.P. * 

 * 

Debtor * 

JOINDER TO MOTIONS FOR STAY PENDING APPEAL 

OF THE COURT’S ORDER CONFIRMING THE 

DEBTOR’S FIFTH AMENDED PLAN 

Now into Court, through undersigned counsel, come The Dugaboy Investment Trust and 

Get Good Trust (“Movers”) who hereby submit this Joinder to Motions for Stay Pending Appeal of 

the Court’s Order Confirming the Debtor’s Fifth Amended Plan (“Joinder”), and respectfully represent as 

follows: 

Notice of Joinder

1. The Dugaboy Investment Trust and Get Good Trust hereby join and adopt all 

assertions as stated in the following: 

 a. Emergency Motion of the Advisors for Stay Pending Appeal of the 

Confirmation Order, and Brief in Support thereof filed on February 28, 2021 (Dkt. 

Case 19-34054-sgj11 Doc 1971 Filed 03/04/21 Entered 03/04/21 17:04:18 Page 1 of 14

Appx. 0331

 ̈1¤}HV5#$ %H«

1934054210304000000000005

Docket #1971 Date Filed: 03/04/2021

Case 3:21-cv-01710-N Document 10-11 Filed 10/05/21 Page 2 of 46 PageID 385

Case 22-03052-sgj Doc 10-11 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 11 Page 2 of 46

000416

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 158 of 208 PageID 486
{00375210-8} 

2 

#1955) filed by Highland Capital Management Fund Advisors, L.P. and NexPoint 

Advisors, L.P.; and 

 b. Motion for Stay Pending Appeal of the Court’s Order Confirming the 

Debtor’s Fifth Amended Plan filed on March 3, 2021 (Dkt. #1967) filed by Highland 

Income Fund, NexPoint Strategic Opportunities Fund, Highland Global Allocation Fund, 

and NexPoint Capital, Inc. 

(collectively, “Motions for Stay”). 

2. Further, to the extent any other parties seek the relief requested in the Motions for 

Stay subsequent to filing this Joinder, The Dugaboy Investment Trust and Get Good Trust shall 

support the relief requested in the subsequent filing. 

3. In addition to the reasons set forth in the Motions for Stay, Movers believe that a 

stay is warranted based upon the following: 

a. Success on the Merits - 

i. The Court, in confirming the Debtor’s Plan, distinguished 5th Circuit case 

law (In Re Pacific Lumber, 584 F.3d 229 (5th Cir 2009) regarding the 

release and exculpation provisions set forth in the Plan. Movers believe 

the 5th Circuit’s decision in Securities and Exchange Commission v. 

Stanford International Bank, Ltd., No. 17-10663 (5th Cir. 2019) (copy 

attached) is the latest expression by the 5th Circuit that such release and 

exculpation provisions are not permissible as a matter of law. Judge Jones 

in Stanford stated: 

“The prohibition on enjoining unrelated, third party claims without the 

third parties’ consent does not depend on the Bankruptcy Code, but it is a 

maxim of law not abrogated by the district court’s equitable power to 

fashion ancillary relief measures.” 

Case 19-34054-sgj11 Doc 1971 Filed 03/04/21 Entered 03/04/21 17:04:18 Page 2 of 14

Appx. 0332

Case 3:21-cv-01710-N Document 10-11 Filed 10/05/21 Page 3 of 46 PageID 386

Case 22-03052-sgj Doc 10-11 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 11 Page 3 of 46

000417

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 159 of 208 PageID 487
{00375210-8} 

3 

The Stanford decision rendered some ten (10) years after In re Pacific Lumber

reaffirms the 5th Circuit’s bright line prohibition concerning release and exculpation 

provisions and that, notwithstanding the equitable powers of District and Bankruptcy 

Courts, such provisions are not permissible as a matter of law. 

b. Public Policy - 

The other issue raised by Movers is the issue relative to the unfair discrimination 

contained in the Plan. As a policy matter, absent a clear directive by the 5th Circuit that 

the language in 11 U.S.C. § 1129(b) means something other than prohibiting unfair 

discrimination, this Court should suspend the effect of the Plan that discriminates against 

the Class 8 creditors. 

WHEREFORE, based upon the foregoing Joinder to Motions for Stay Pending Appeal 

of the Court’s Order Confirming the Debtor’s Fifth Amended Plan, The Dugaboy Investment 

Trust and Get Good Trust assert a stay of the Confirmation Order is justified under each of the 

applicable factors for a stay pending appeal. Therefore, The Dugaboy Investment Trust and Get 

Good Trust pray that this Court grant a stay of the Confirmation Order with respect to such 

provisions pending appeal and for all other relief that is just and equitable. 

March 4, 2021 

/s/Douglas S. Draper. 

Douglas S. Draper, La. Bar No. 5073 

ddraper@hellerdraper.com 

Leslie A. Collins, La. Bar No. 14891 

lcollins@hellerdraper.com 

Greta M. Brouphy, La. Bar No. 26216 

gbrouphy@hellerdraper.com 

Heller, Draper & Horn, L.L.C. 

650 Poydras Street, Suite 2500 

New Orleans, LA 70130 

Telephone: (504) 299-3300 

Case 19-34054-sgj11 Doc 1971 Filed 03/04/21 Entered 03/04/21 17:04:18 Page 3 of 14

Appx. 0333

Case 3:21-cv-01710-N Document 10-11 Filed 10/05/21 Page 4 of 46 PageID 387

Case 22-03052-sgj Doc 10-11 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 11 Page 4 of 46

000418

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 160 of 208 PageID 488
{00375210-8} 

4 

Fax: (504) 299-3399 

Attorneys for The Dugaboy Investment Trust 

 and Get Good Trust 

CERTIFICATE OF SERVICE 

 I, Douglas S. Draper, certify that on March 4, 2021, a copy of the above and foregoing 

Joinder to Motions for Stay Pending Appeal of the Court’s Order Confirming the Debtor’s Fifth 

Amended Plan has been served electronically to all parties entitled to receive electronic notice in 

this matter through the Court’s ECF system as follows: 

• David G. Adams david.g.adams@usdoj.gov, 

southwestern.taxcivil@usdoj.gov;dolores.c.lopez@usdoj.gov 

• Amy K. Anderson aanderson@joneswalker.com, lfields@joneswalker.com;amyanderson-9331@ecf.pacerpro.com 

• Zachery Z. Annable zannable@haywardfirm.com 

• Bryan C. Assink bryan.assink@bondsellis.com 

• Asif Attarwala asif.attarwala@lw.com 

• Joseph E. Bain JBain@joneswalker.com, kvrana@joneswalker.com;joseph-bain8368@ecf.pacerpro.com;msalinas@joneswalker.com 

• Michael I. Baird baird.michael@pbgc.gov, efile@pbgc.gov 

• Sean M. Beach bankfilings@ycst.com, sbeach@ycst.com 

• Paul Richard Bessette pbessette@KSLAW.com, 

ccisneros@kslaw.com;jworsham@kslaw.com;kbryan@kslaw.com;jcarvalho@kslaw.com

;rmatsumura@kslaw.com 

• John Y. Bonds john@bondsellis.com 

• Larry R. Boyd lboyd@abernathy-law.com, ljameson@abernathy-law.com 

• Jason S. Brookner jbrookner@grayreed.com, 

lwebb@grayreed.com;acarson@grayreed.com;cpatterson@grayreed.com 

• Greta M. Brouphy gbrouphy@hellerdraper.com, 

dhepting@hellerdraper.com;vgamble@hellerdraper.com 

• M. David Bryant dbryant@dykema.com, csmith@dykema.com 

• Candice Marie Carson Candice.Carson@butlersnow.com 

• Annmarie Antoniette Chiarello achiarello@winstead.com 

• Shawn M. Christianson schristianson@buchalter.com, cmcintire@buchalter.com 

• James Robertson Clarke robbie.clarke@bondsellis.com 

• Matthew A. Clemente mclemente@sidley.com, matthew-clemente8764@ecf.pacerpro.com;efilingnotice@sidley.com;ebromagen@sidley.com;alyssa.russel

l@sidley.com;dtwomey@sidley.com 

• Megan F. Clontz mclontz@spencerfane.com, lvargas@spencerfane.com 

• Andrew Clubok andrew.clubok@lw.com 

• Leslie A. Collins lcollins@hellerdraper.com 

• David Grant Crooks dcrooks@foxrothschild.com, 

etaylor@foxrothschild.com,jsagui@foxrothschild.com,plabov@foxrothschild.com,jmanfr

ey@foxrothschild.com 

Case 19-34054-sgj11 Doc 1971 Filed 03/04/21 Entered 03/04/21 17:04:18 Page 4 of 14

Appx. 0334

Case 3:21-cv-01710-N Document 10-11 Filed 10/05/21 Page 5 of 46 PageID 388

Case 22-03052-sgj Doc 10-11 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 11 Page 5 of 46

000419

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 161 of 208 PageID 489
{00375210-8} 

5 

• Gregory V. Demo gdemo@pszjlaw.com, 

jo'neill@pszjlaw.com;ljones@pszjlaw.com;jfried@pszjlaw.com;ikharasch@pszjlaw.com

;jmorris@pszjlaw.com;jpomerantz@pszjlaw.com;hwinograd@pszjlaw.com;kyee@pszjla

w.com;lsc@pszjlaw.com 

• Casey William Doherty casey.doherty@paulhastings.com 

• Douglas S. Draper ddraper@hellerdraper.com, 

dhepting@hellerdraper.com;vgamble@hellerdraper.com 

• Lauren Kessler Drawhorn lauren.drawhorn@wickphillips.com, 

samantha.tandy@wickphillips.com 

• Vickie L. Driver Vickie.Driver@crowedunlevy.com, 

crissie.stephenson@crowedunlevy.com;seth.sloan@crowedunlevy.com;elisa.weaver@cr

owedunlevy.com;ecf@crowedunlevy.com 

• Jonathan T. Edwards jonathan.edwards@alston.com 

• Jason Alexander Enright jenright@winstead.com 

• Robert Joel Feinstein rfeinstein@pszjlaw.com 

• Matthew Gold courts@argopartners.net 

• Bojan Guzina bguzina@sidley.com 

• Thomas G. Haskins thaskins@btlaw.com 

• Melissa S. Hayward MHayward@HaywardFirm.com, mholmes@HaywardFirm.com 

• Michael Scott Held mheld@jw.com, lcrumble@jw.com 

• Gregory Getty Hesse ghesse@HuntonAK.com, 

amckenzie@HuntonAK.com;tcanada@HuntonAK.com;creeves@HuntonAK.com 

• Juliana Hoffman jhoffman@sidley.com, txefilingnotice@sidley.com;juliannahoffman-8287@ecf.pacerpro.com 

• A. Lee Hogewood lee.hogewood@klgates.com, 

haley.fields@klgates.com;matthew.houston@klgates.com;marybeth.pearson@klgates.com;litigation.docketing@klgates.com;Emily.mather@klgates.co

m;Artoush.varshosaz@klgates.com 

• Warren Horn whorn@hellerdraper.com, 

dhepting@hellerdraper.com;vgamble@hellerdraper.com 

• John J. Kane jkane@krcl.com, ecf@krcl.com;jkane@ecf.courtdrive.com 

• Jason Patrick Kathman jkathman@spencerfane.com, 

gpronske@spencerfane.com;mclontz@spencerfane.com;lvargas@spencerfane.com 

• Edwin Paul Keiffer pkeiffer@romclaw.com, bwallace@romclaw.com 

• Jeffrey Kurtzman kurtzman@kurtzmansteady.com 

• Phillip L. Lamberson plamberson@winstead.com 

• Lisa L. Lambert lisa.l.lambert@usdoj.gov 

• Paul M. Lopez bankruptcy@abernathy-law.com 

• Faheem A. Mahmooth mahmooth.faheem@pbgc.gov, efile@pbgc.gov 

• Ryan E. Manns ryan.manns@nortonrosefulbright.com 

• Thomas M. Melsheimer tmelsheimer@winston.com, tom-melsheimer7823@ecf.pacerpro.com 

• Paige Holden Montgomery pmontgomery@sidley.com, 

txefilingnotice@sidley.com;paige-montgomery7756@ecf.pacerpro.com;crognes@sidley.com;ebromagen@sidley.com;efilingnotice@sid

ley.com 

Case 19-34054-sgj11 Doc 1971 Filed 03/04/21 Entered 03/04/21 17:04:18 Page 5 of 14

Appx. 0335

Case 3:21-cv-01710-N Document 10-11 Filed 10/05/21 Page 6 of 46 PageID 389

Case 22-03052-sgj Doc 10-11 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 11 Page 6 of 46

000420

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 162 of 208 PageID 490
{00375210-8} 

6 

• J. Seth Moore smoore@ctstlaw.com, jsteele@ctstlaw.com 

• John A. Morris jmorris@pszjlaw.com 

• Edmon L. Morton emorton@ycst.com 

• Holland N. O'Neil honeil@foley.com, 

jcharrison@foley.com;acordero@foley.com;holly-holland-oneil-3540@ecf.pacerpro.com 

• Rakhee V. Patel rpatel@winstead.com, 

dgalindo@winstead.com;achiarello@winstead.com 

• Charles Martin Persons cpersons@sidley.com 

• Mark A. Platt mplatt@fbtlaw.com, aortiz@fbtlaw.com 

• Jeffrey Nathan Pomerantz jpomerantz@pszjlaw.com 

• Kimberly A. Posin kim.posin@lw.com, colleen.rico@lw.com 

• Jeff P. Prostok jprostok@forsheyprostok.com, 

lbreedlove@forsheyprostok.com;calendar@forsheyprostok.com;calendar_0573@ecf.cour

tdrive.com;jprostok@ecf.courtdrive.com 

• Linda D. Reece lreece@pbfcm.com 

• Penny Packard Reid preid@sidley.com, txefilingnotice@sidley.com;penny-reid4098@ecf.pacerpro.com;ncade@sidley.com 

• Suzanne K. Rosen srosen@forsheyprostok.com, 

lbreedlove@forsheyprostok.com;calendar@forsheyprostok.com;srosen@ecf.courtdrive.c

om;calendar_0573@ecf.courtdrive.com 

• Davor Rukavina drukavina@munsch.com 

• Amanda Melanie Rush asrush@jonesday.com 

• Alyssa Russell alyssa.russell@sidley.com 

• Douglas J. Schneller douglas.schneller@rimonlaw.com 

• Brian Patrick Shaw shaw@roggedunngroup.com, 

cashion@roggedunngroup.com;jones@roggedunngroup.com 

• Michelle E. Shriro mshriro@singerlevick.com, 

scotton@singerlevick.com;tguillory@singerlevick.com 

• Nicole Skolnekovich nskolnekovich@hunton.com, 

plozano@huntonak.com;astowe@huntonak.com;creeves@huntonak.com 

• Jared M. Slade jared.slade@alston.com 

• Frances Anne Smith frances.smith@judithwross.com, 

michael.coulombe@judithwross.com 

• Eric A. Soderlund eric.soderlund@judithwross.com 

• Martin A. Sosland martin.sosland@butlersnow.com, 

ecf.notices@butlersnow.com,velvet.johnson@butlersnow.com 

• Laurie A. Spindler Laurie.Spindler@lgbs.com, Dora.CasianoPerez@lgbs.com;dallas.bankruptcy@lgbs.com 

• Jonathan D. Sundheimer jsundhimer@btlaw.com 

• Kesha Tanabe kesha@tanabelaw.com 

• Chad D. Timmons bankruptcy@abernathy-law.com 

• Dennis M. Twomey dtwomey@sidley.com 

• Basil A. Umari BUmari@dykema.com, pelliott@dykema.com 

• United States Trustee ustpregion06.da.ecf@usdoj.gov 

• Artoush Varshosaz artoush.varshosaz@klgates.com, Julie.garrett@klgates.com 

• Julian Preston Vasek jvasek@munsch.com 

Case 19-34054-sgj11 Doc 1971 Filed 03/04/21 Entered 03/04/21 17:04:18 Page 6 of 14

Appx. 0336

Case 3:21-cv-01710-N Document 10-11 Filed 10/05/21 Page 7 of 46 PageID 390

Case 22-03052-sgj Doc 10-11 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 11 Page 7 of 46

000421

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 163 of 208 PageID 491
{00375210-8} 

7 

• Donna K. Webb donna.webb@usdoj.gov, 

brian.stoltz@usdoj.gov;CaseView.ECF@usdoj.gov;brooke.lewis@usdoj.gov 

• Jaclyn C. Weissgerber bankfilings@ycst.com, jweissgerber@ycst.com 

• Elizabeth Weller dallas.bankruptcy@publicans.com, dora.casianoperez@lgbs.com;Melissa.palo@lgbs.com 

• Daniel P. Winikka danw@lfdslaw.com, 

craigs@lfdslaw.com,dawnw@lfdslaw.com,ivys@lfdslaw.com 

• Hayley R. Winograd hwinograd@pszjlaw.com 

• Megan Young-John myoung-john@porterhedges.com 

I also caused same to be served on March 5, 2021, by Docusource via U.S. First Class Mail, 

postage prepaid upon the following parties: 

Paul N. Adkins 

11 Mount Emily Road #07-27 

Singapore, 228493 

American Express National Bank 

c/o Becket and Lee LLP 

PO Box 3001 

Malvern, PA 19355-0701 

James T. Bentley 

Schulte Roth & Zabel LLP 

919 Third Avenue 

New York, NY 10022 

Jeffrey E. Bjork 

LATHAM & WATKINS LLP 

355 South Grand Avenue, Ste. 100 

Los Angeles, CA 90071 

Jessica Boelter 

SIDLEY AUSTIN LLP 

787 Seventh Avenue 

New York, NY 10019 

Matthew G. Bouslog 

GIBSON, DUNN & CRUTCHER LLP 

3161 Michelson Drive 

Irvine, CA 92612 

William P. Bowden 

Ashby & Geddes, P.A. 

500 Delaware Avenue, 8th Floor 

P.O. Box 1150 

Case 19-34054-sgj11 Doc 1971 Filed 03/04/21 Entered 03/04/21 17:04:18 Page 7 of 14

Appx. 0337

Case 3:21-cv-01710-N Document 10-11 Filed 10/05/21 Page 8 of 46 PageID 391

Case 22-03052-sgj Doc 10-11 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 11 Page 8 of 46

000422

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 164 of 208 PageID 492
{00375210-8} 

8 

Wilmington, DE 19899 

Candace C. Carlyon 

CARLYON CICA CHTD. 

265 e. Warm Springs Road., Ste 107 

Las Vegas, NV 89119 

Joseph L. Christensen 

McCollom D'Emilio Smith Uebler LLC 

2751 Centerville Road, Suite 401 

Wilmington, DE 19808 

Louis J. Cisz 

Nixon Peabody LLP 

One Embarcadero Center, 32nd Fl 

San Francisco, CA 94111 

Kevin M. Coen 

MORRIS, NICHOLS, ARSHT & TUNNELL LLP 

1201 North Market Street, Suite 1600 

1000 North King Street 

Wilmington, DE 19801 

Debra A. Dandeneau 

Baker & McKenzie LLP 

425 5th Ave. 

New York, NY 10018 

Deloitte Tax LLP 

1111 Bagby Street, Ste. 4500 

Houston, TX 77002 

Mark. L. Desgrosseilliers 

Chipman, Brown, Cicero & Cole, LLP 

Hercules Plaza 

1313 North Market Street, Suite 5400 

Wilmington, DE 19801 

Development Specialists, Inc. 

333 South Grand Ave., Ste. 4070 

Los Angeles, CA 90071 

Fair Harbor Capital, LLC 

Ansonia Finance Station 

PO Box 237037 

New York, NY 10023 

Case 19-34054-sgj11 Doc 1971 Filed 03/04/21 Entered 03/04/21 17:04:18 Page 8 of 14

Appx. 0338

Case 3:21-cv-01710-N Document 10-11 Filed 10/05/21 Page 9 of 46 PageID 392

Case 22-03052-sgj Doc 10-11 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 11 Page 9 of 46

000423

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 165 of 208 PageID 493
{00375210-8} 

9 

Bojan Guzina 

Sidley Austin LLP 

One South Dearborn Street 

Chicago, IL 60603 

Emily M. Hahn 

Abernathy, Roeder, Boyd & Hullett, P.C. 

1700 Redbud Blvd. Ste. 300 

McKinney, TX 75069 

Hain Capital Group, LLC 

301 Route 17, 6th Floor 

Rutherford, NJ 07070 

Marc B. Hankin 

Jenner & Block LLP 

919 Third Avenue 

New York, NY 10022-3098 

Michelle Hartman 

Baker & McKenzie LLP 

1900 N. Pearl, Ste. 1500 

Dallas, TX 75201 

Hayward & Associates PLLC 

10501 N. Central Expwy., Ste 106 

Dallas, TX 75231 

William A. Hazeltine 

Sullivan Hazeltine Allinson LLC 

901 North Market Street 

Suite 1300 

Wilmington, DE 19801 

Kuan Huang 

Latham & Watkins LLP 

855 Third Avenue 

New York, NY 10022 

Ira D Kharasch 

10100 Santa Monica Boulevard 

13th Floor 

Los Angeles, CA 90067 

 

Case 19-34054-sgj11 Doc 1971 Filed 03/04/21 Entered 03/04/21 17:04:18 Page 9 of 14

Appx. 0339

Case 3:21-cv-01710-N Document 10-11 Filed 10/05/21 Page 10 of 46 PageID 393

Case 22-03052-sgj Doc 10-11 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 11 Page 10 of 46

000424

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 166 of 208 PageID 494
{00375210-8} 

10 

Marshall R. King 

GIBSON, DUNN & CRUTCHER LLP 

200 Park Avenue 

Suite 1400 

New York, NY 10066 

Alan J. Kornfeld 

Pachulski Stang Ziehl & Jones LLPL 

10100 Santa Monica Blvd., 13 Fl 

Los Angeles, CA 90067 

Kurtzman Carson Consultants LLC 

Attn: Drake Foster 

222 N. Pacific Coast Highway, 3rd Floor 

El Segundo, CA 90245 

 Kurtzman Carson Consultants, LLC 

222 N. Pacific Coast Highway, Ste. 300 

El Segundo, CA 90245 

M. Natasha Labovitz 

Debevoise & Plimpton LLP 

919 Third Avenue 

New York, NY 10022 

Richard B. Levin 

Jenner & Block LLP 

919 Third Avenue 

New York, NY 10022-3098 

Maxim B Litvak 

Pachulski Stang Ziehl & Jones LLP 

150 California Street 

15th Floor 

San Francisco, CA 94111 

John E. Lucian 

Blank Rome LLP 

1201 N. Market Street, Sutie 800 

1000 North King Street 

Wilmington, DE 19801 

Lauren Macksoud 

1221 Avenue of the Americas 

New York, NY 10020-1089 

Case 19-34054-sgj11 Doc 1971 Filed 03/04/21 Entered 03/04/21 17:04:18 Page 10 of 14

Appx. 0340

Case 3:21-cv-01710-N Document 10-11 Filed 10/05/21 Page 11 of 46 PageID 394

Case 22-03052-sgj Doc 10-11 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 11 Page 11 of 46

000425

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 167 of 208 PageID 495
{00375210-8} 

11 

Mark M. Maloney 

King & Spalding LLP 

191 Peachtree St. 

Suite 4900 

Atlanta, GA 30303-1763 

 

Mark M. Maloney 

King & Spalding LLP 

1180 Peachtree Steet, NE 

Atlanta, GA 30309 

Terri L. Mascherin 

Jenner & Block LLP 

353 N. Clark Street 

Chicago, IL 60654-3456 

Patrick C. Maxcy 

DENTONS US LLP 

233 South Wacker Drive, Suite 5900 

Chicago, IL 60606-6361 

R. Stephen McNeill 

POTTER ANDERSON & CORROON LLP 

1313 North Market Street, 6th Fl 

Wilmington, DE 19801 

Mercer (US) Inc. 

155 N. Wacker Drive, Ste. 1500 

Chicago, IL 60606 

Michael J. Merchant 

RICHARDS, LAYTON & FINGER, P.A. 

one Rodney Square 

920 North King Street 

Wilmington, DE 19801 

Curtis S. Miller 

MORRIS, NICHOLS, ARSHT & TUNNELL LLP 

1201 North Market Street, Suite 1600 

1000 North King Street 

Wilmington, DE 19801 

 

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000426

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{00375210-8} 

12 

Josef W. Mintz 

Blank Rome LLP 

1201 Market Street, Suite 800 

1000 North King Street 

Wilmington, DE 19801 

Joseph T. Moldovan 

MORRISON COHEN LLP 

909 Third Avenue 

New York, NY 10022 

Alan A. Moskowitz 

GIBSON, DUNN & CRUTCHER LLP 

200 Park Avenue 

New York, NY 10066 

Michael R. Nestor 

YOUNG CONAWAY STARGATT & TAYLOR, LL 

Rodney Square 

1000 North King Street 

Wilmington, DE 19801 

James E. O'Neill 

Pachulski Stang Ziehl & Jones LLP 

919 North Market Street, 17th Fl. 

Wilmington, DE 19801 

Tracy M. O'Steen 

CARLYON CICA CHTD. 

265 E. Warm Springs Road., Ste 107 

Las Vegas, NV 89119 

Jeffrey N. Pomerantz 

Pachulski Stang Ziehl & Jones LLP 

10100 Santa Monica Blvd., 13th Floor 

Los Angeles, CA 90067 

Kathleen Preston 

Winston & Strawn LLP 

800 Capitol Street, Ste. 2400 

Houston, TX 77002 

Michael A. Rosenthal - DO NOT USE 

GIBSON, DUNN & CRUTCHER LLP 

200 Park Avenue 

New York, NY 10066 

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000427

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{00375210-8} 

13 

Jeremy W. Ryan 

POTTER ANDERSON & CORROON LLP 

1313 North Market Street, 6th Fl 

Wilmington, DE 19801 

James P. Seery 

795 Columbus Ave., 12A 

New York, NY 10025 

Sally T. Siconolfi 

MORRISON COHEN LLP 

909 Third Avenue 

New York, NY 10022 

Sarah E. Silveira 

RICHARDS, LAYTON & FINGER, P.A. 

One Rodney Square 

920 North King Street 

Wilmington, DE 19801 

D. Ryan Slaugh 

POTTER ANDERSON & CORROON LLP 

1313 North Market Street, 6th Fl 

Wilmington, DE 19801 

Tracy K. Stratford 

Jones Day 

North Point 

901 Lakeside Ave. 

Cleveland, OH 44114 

Daniel E. Stroik 

Debevoise & Plimpton LLP 

919 Third Avenue 

New York, NY 10022 

Sarah A. Tomkowiak 

Latham & Watkins LLP 

555 Eleventh Street, NW 

Suite 1000 

Washington, DC 20004-1304 

 

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000428

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{00375210-8} 

14 

Stephen G. Topetzes 

K&L Gates LLP 

1601 King St., N.W. 

Washington, DC 20006 

Thomas A. Uebler 

McCollom D'Emilio Smith Uebler LLC 

2751 Centerville Road, Suite 401 

Wilmington, DE 19808 

Michael L. Vild 

CROSS & SIMON, LLC 

1105 N. Market Street, Suite 901 

1000 North King Street 

Wilmington, DE 19801 

Elissa A. Wagner 

Pachulski Stang Ziehl & Jones LLP 

10100 Santa Monica Blvd., 13th Floor 

Los Angeles, CA 90067-4003 

Erica S. Weisgerber 

Debevoise & Plimpton LLP 

919 Third Avenue 

New York, NY 10022 

Wilmer Cutler Pickering Hale and Dorr LLP 

60 State Street 

Boston, MA 02109 

James A. Wright 

K&L Gates LLP 

State Street Financial Center 

One Lincoln St. 

Boston, MA 02111 

Sean M. Young Conway Stargatt & Taylor, LLP 

Young Conway Stargatt & Taylor, LLP 

Rodney Square 

1000 North King Street 

Wilmington, DE 19801 

/s/Douglas S. Draper. 

Douglas S. Draper, La. Bar No. 5073 

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000429

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IN THE UNITED STATES COURT OF APPEALS 

FOR THE FIFTH CIRCUIT 

No. 17-10663 

SECURITIES AND EXCHANGE COMMISSION 

Plaintiff 

v. 

STANFORD INTERNATIONAL BANK, LIMITED 

Defendant 

v. 

JOSEPH BECKER; TERENCE BEVEN; WANDA BEVIS; 

THOMAS EDDIE BOWDEN; TROY L. LILLIE, JR., et al 

Movants - Appellants 

DOUG MCDANIEL; SCOTT NOTOWICH; 

EDDIE ROLLINS; CORDELL HAYMON; et al, 

Objecting Parties - Appellants 

v. 

CERTAIN UNDERWRITERS AT LLOYD’S OF LONDON; 

ARCH SPECIALTY INSURANCE COMPANY; 

LEXINGTON INSURANCE COMPANY, 

Interested Parties - Appellees 

RALPH S. JANVEY, 

Appellee 

*********************** 

CERTAIN UNDERWRITERS AT LLOYD’S OF LONDON; 

United States Court of Appeals 

Fifth Circuit 

FILED

June 17, 2019 

Lyle W. Cayce 

Clerk 

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000430

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2 

ARCH SPECIALTY INSURANCE COMPANY, 

Plaintiffs - Appellees 

v. 

RALPH S. JANVEY, In his Capacity as Court Appointed Receiver for 

Stanford International Bank Limited, Stanford Group Company, Stanford 

Capital Managment L.L.C., Stanford Financial Group, and Stanford 

Financial Group Bldg, 

Defendant - Appellee 

v. 

CORDELL HAYMON, 

Intervenor - Appellant 

************************************* 

CERTAIN UNDERWRITERS AT LLOYD’S OF LONDON; 

ARCH SPECIALTY INSURANCE COMPANY; 

LEXINGTON INSURANCE COMPANY, 

Plaintiffs - Appellees 

v. 

CORDELL HAYMON, 

Objecting Party - Appellant 

v. 

RALPH S. JANVEY, 

Intervenor - Appellee 

*************************************** 

CERTAIN UNDERWRITERS AT LLOYD’S OF LONDON; 

ARCH SPECIALTY INSURANCE COMPANY; 

LEXINGTON INSURANCE COMPANY, 

Plaintiffs - Appellees 

v. 

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000431

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No. 17-10663 

3 

RALPH S. JANVEY, 

Intervenor Defendant - Appellee 

v. 

CORDELL HAYMON, 

Objecting Party - Appellant 

********************************************* 

CORDELL HAYMON, 

Third Party Plaintiff - Appellant 

v. 

CERTAIN UNDERWRITERS OF LLOYD’S OF LONDON, Claims asserted 

by Claude F. Reynaud, Jr. 

Third Party Defendant - Appellee 

v. 

RALPH S. JANVEY, 

Appellee 

Appeals from the United States District Court 

for the Northern District of Texas 

Before JONES, CLEMENT, and SOUTHWICK, Circuit Judges. 

EDITH H. JONES, Circuit Judge: 

These appeals challenge the district court’s approval of a global 

settlement between Ralph Janvey, the Receiver for Stanford International 

Bank and related entities, and various insurance company Underwriters, who 

issued policies providing coverage for fidelity breaches, professional indemnity, 

directors and officers protection, and excess losses. The settlement yielded $65 

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000432

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No. 17-10663 

4 

million for the Receiver’s claims against the insurance policy proceeds, but it 

wipes out, through “bar orders,” claims by coinsureds to the policy proceeds 

and their extracontractual claims against the Underwriters even if such claims 

would not reduce or affect the policies’ coverage limits. Among the parties 

whose claims were barred are Appellants comprising (a) two groups of former 

Stanford managers and employees; (b) Cordell Haymon, a Stanford entity 

director who settled with the Receiver for $2 million; and (c) a group of 

Louisiana retiree-investors. 

A constellation of issues surrounding the global settlement is 

encapsulated in the question whether the district court abused its discretion 

in approving the settlement and bar orders. Based on the nature of in rem 

jurisdiction and the limitations on the court’s and Receiver’s equitable power, 

we conclude the district court lacked authority to approve the Receiver’s 

settlement to the extent it (a) nullified the coinsureds’ claims to the policy 

proceeds without an alternative compensation scheme; (b) released claims the 

Estate did not possess; and (c) barred suits that could not result in judgments 

against proceeds of the Underwriters’ policies or other receivership assets. 

Accordingly, we VACATE the district court’s order approving the settlement 

and bar orders and REMAND for further proceedings consistent with this 

opinion. 

BACKGROUND 

 The massive Stanford Financial Ponzi scheme defrauded more than 

18,000 investors who collectively lost over $5 billion. As part of a securities 

fraud lawsuit brought by the SEC, the district court appointed the Receiver “to 

immediately take and have complete and exclusive control” of the receivership 

estate and “any assets traceable” to it. The court granted the Receiver “the full 

power of an equity receiver under common law,” including the right to assert 

claims against third parties and “persons or entities who received assets or 

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000433

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No. 17-10663 

5 

records traceable to the Receivership Estate.” SEC v. Stanford Int’l Bank, Ltd., 

776 F. Supp. 2d 323, 326 (N.D. Tex. 2011). The district court also held that the 

court possessed exclusive jurisdiction over a group of insurance policies and 

their proceeds, at issue in this case, and ruled that, other than a lawsuit 

involving the Stanford criminal defendants, “[n]o persons or entities may bring 

further claims related to the [Proceeds] in any forum other than” the district 

court. Neither of these latter two orders was timely appealed. 

 The policies issued to the Stanford entities covered, in different 

arrangements, losses and defense costs for the entities and their officers, 

directors and certain employees. At issue are the following policies: a 

Directors’ and Officers’ Liability and Company Indemnity Policy (“D&O”); a 

Financial Institutions Crime and Professional Indemnity Policy, including 

(a) first-party fidelity coverage for employee theft (“Fidelity Bond”) and “[l]oss 

resulting directly from dishonest, malicious or fraudulent acts committed by 

an Employee,” and (b) third-party coverage for professional indemnity (“PI 

Policy”); and an Excess Blended “Wrap” Policy (“Excess Policy”). The policy 

limits are as follows: 

 Stanford Bank Entities Stanford Brokerage Entities 

D&O Policy $5 million $5 million 

PI Policy $5 million per Claim 

$10 million aggregate 

$5 million per Claim 

$10 million aggregate 

Fidelity 

Bond 

$5 million per Loss 

$10 million aggregate 

$5 million per Loss 

$10 million aggregate 

Excess 

Policy 

$45 million each Claim or Loss/$90 million aggregate 

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000434

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No. 17-10663 

6 

The maximum amount of remaining coverage is disputed. According to 

the district court, the Underwriters have paid some $30 million in claims under 

the policies for insureds’ defense costs. Underwriters contend that only $46 

million remains available because the losses resulted from a single event – the 

Ponzi scheme. The Receiver argues that the conduct implicates the aggregate 

loss limits up to $101 million of remaining coverage. The questions of coverage 

ultimately depend on the identity of the insureds under each policy and the 

nature of the claims, and these issues are hotly contested. The Stanford 

corporate entities are insured under all of the policies, but Stanford directors, 

officers, and employees are coinsureds only under the D&O, PI, and Excess 

policies.1 Each policy is subject to multiple definitions and exclusions. After 

the Receiver made numerous claims for coverage under the policies (the “Direct 

Claims”) that were met with Underwriters’ denial based on policy exclusions, 

several lawsuits ensued. 

The Receiver also pursued the policy proceeds indirectly by filing 

lawsuits (the “Indirect Claims”) against hundreds of former Stanford directors, 

officers, and employees, alleging fraudulent transfers and unjust enrichment 

and/or breach of fiduciary duty. The Receiver obtained a $2 billion judgment 

against one former Stanford International Bank director and a $57 million 

judgment against a former Bank treasurer, both of whom were potentially 

covered under the policies. The Receiver continues to litigate similar claims 

against the coinsured Appellants who were Stanford managers and employees. 

See, e.g., Stanford International Bank, Ltd., et al., v. James R. Alguire, et al., 

No. 3:09-CV-0724-N (N.D. Tex., filed Dec. 18, 2019).

 

1 There is no dispute that the Appellants here are coinsured under the noted policies, 

but not coinsured under the Fidelity bond. The chief dispute is about the effect of certain 

limitations and exclusions within the policies. 

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7 

 After eight years of sparring, the Receiver and Underwriters, together 

with the court-appointed Examiner on behalf of Stanford investors, mediated 

their disputes for several months in 2015. Mediation initially resulted in a 

Settlement Proposal under which the Underwriters agreed to pay the Receiver 

$65 million, and in return the Receiver would “fully release any and all 

insureds under the relevant policies.” The purpose of the complete release was 

to shield the Underwriters from any policy obligations to defend or indemnify 

former Stanford personnel, including the employee Appellants, in the 

Receiver’s Indirect Claim lawsuits. The parties almost immediately disagreed 

about the content of the settlement, however, and the Underwriters filed an 

Expedited Motion to Enforce the Settlement Agreement. The district court 

denied the motion and instructed the parties to continue negotiating. On 

June 27, 2016, the Receiver and Underwriters notified the court that they had 

entered into a new settlement agreement, which the Examiner supported. 

 Under this new settlement, the Underwriters again agreed to pay $65 

million into the receivership estate, but the settlement required orders barring 

all actions against Underwriters relating to the policies or the Stanford 

Entities. Paragraph 35 of the settlement provides Underwriters the 

unqualified right to withdraw from the settlement if the court refuses to issue 

the bar orders. The bar orders were necessary because, unlike the terms of the 

first proposed settlement, the Receiver is required to release only the Estate’s 

claims against 16 directors and officers (rather than all insureds), as well as 

the judgments already obtained against certain directors and officers.2 All 

other former Stanford employees, officers and directors, including Appellants, 

 

2 Oddly, the settlement releases claims only against those directors and officers who 

were among the most culpable for the Ponzi scheme. And it releases Underwriters from any 

obligation in connection with the aforementioned judgments for $2 billion and $57 million. 

This oddity should have been considered when assessing the fairness of the settlement. 

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No. 17-10663 

8 

remain subject to ongoing or potential litigation by the Receiver once the 

litigation stay against them is lifted. Some Appellants assert that their 

individual costs of defending the Receiver’s ongoing actions already exceed 

$10,000. But the bar orders prevent them from suing the Underwriters for 

their costs of defense and indemnity under the insurance policies, even though 

they are coinsured, or for extra-contractual or statutory claims. 

 The Receiver moved for approval of the settlement and entry of the bar 

orders. The district court directed notice to all interested parties, and received 

objections from several third parties, including Appellants. The court heard 

arguments of counsel regarding the settlement, but it refused to allow parties 

to offer evidence or live testimony or engage in cross-examination. After the 

hearing, parties were permitted to file additional declarations or affidavits. 

 The district court approved the settlement and bar orders, denied all 

objections, and approved the payment of $14 million of attorney fees to 

Receiver’s counsel. Separate Final Judgments and Bar Orders were entered 

in each action pending before it relating to the Stanford Entities and in 

Appellant Haymon’s and Appellant Alvarado’s separate lawsuits against the 

Underwriters. The district court rejected all post-trial motions. 

 A more complete discussion of the court’s findings will follow, but in 

general, the court found that the settlement resulted from “vigorous, good 

faith, arm’s-length, mediated negotiations” and concluded that the settlement 

was “in all respects, fair, reasonable, and adequate, and in the best interests 

of all Persons claiming an interest in, having authority over, or asserting a 

claim against Underwriters, Underwriters’ Insureds, the Stanford Entities, 

the Receiver, or the Receivership Estate.” The court further found that the 

settlement and bar orders were “fair, just, and equitable,” and it rejected the 

Appellants’ due process claims based on their exclusion from settlement talks 

and the lack of an evidentiary hearing. While the court recognized that the 

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No. 17-10663 

9 

bar orders discriminate between a few Stanford officers and the Appellants, it 

reasoned that “on balance the unfairness alleged by the Objectors is either 

mitigated by other circumstances or simply outweighed by the benefit of the 

settlement in terms of fairness, equity, reasonableness, and the best interests 

of the receivership.”

 The Appellants fall into three categories. The McDaniel Appellants and 

“Alvarado”3 Appellants are former Stanford managers or employees from 

offices around the country (“Employees”) who seek contractual coverage under 

the insurance policies and press extra-contractual claims against the 

Underwriters, including for bad faith and statutory violations of the Texas 

Insurance Code. Appellant Cordell Haymon (“Haymon”) was a member of 

Stanford Trust Company’s Board of Directors who settled the Receiver’s claims 

against him for $2 million before the instant global settlement was reached, 

and in return received the express right to pursue Underwriters for policy 

coverage and extra-contractual claims. Finally, the Louisiana Retirees/Becker 

Appellants (“Retirees”) are former Stanford investors who sued Stanford 

brokers covered by the insurance policies and seek to recover from the 

Underwriters directly pursuant to the Louisiana Direct Action Statute, La. 

Rev. Stat. 22:1269. 

 Each group of Appellants raises different challenges to the court’s 

approval of the settlement and bar orders. They appeal from the district court’s 

order denying their objections to the proposed settlement, the Final Bar Order, 

 

3 While Alvarado was originally a party to this appeal, he withdrew his individual 

appeal on April 19, 2018. The other employees to that action remain as appellants and will 

be denominated, for the sake of convenience, Alvarado Appellants. 

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No. 17-10663 

10 

and the Order Approving Attorneys’ Fees4 for the Receiver’s counsel. The 

Stanford Employees additionally appeal the Order denying their new trial 

motion, and Haymon appeals from the Order denying his motion for 

reconsideration. After explaining the principles that govern the court’s 

management of the Receivership, we will analyze each set of Appellants’ 

objections. 

STANDARD OF REVIEW

A district court’s entry of a bar order, like other actions in supervising 

an equity receivership, is reviewed for abuse of discretion. SEC v. Safety Fin. 

Serv., Inc., 674 F.2d 368, 373 (5th Cir. 1982); Newby v. Enron Corp., 542 F.3d 

463, 468 (5th Cir. 2008). A district court’s determination of the fairness of a 

settlement in an equity receivership proceeding is reviewed for an abuse of 

discretion. Sterling v. Stewart, 158 F.3d 1199, 1202 (11th Cir. 1998) 

(“Determining the fairness of the settlement [in an equity receivership] is left 

to the sound discretion of the trial court and we will not overturn the court’s 

decision absent a clear showing of abuse of that discretion.”). There is no abuse 

of discretion where factual findings are not clearly erroneous and rulings are 

without legal error. Marlin v. Moody Nat. Bank, N.A., 533 F.3d 374, 377 (5th 

Cir. 2008). A district court’s denial of a Rule 59 motion for a new trial or to 

alter or amend a judgment also is reviewed for an abuse of discretion. St. Paul 

Mercury Ins. Co. v. Fair Grounds Corp., 123 F.3d 336, 339 (5th Cir. 1997). This 

Court reviews de novo a district court’s application of exceptions to the Anti–

Injunction Act as a question of law. Moore v. State Farm Fire & Cas. Co., 

556 F.3d 264, 269 (5th Cir. 2009). 

 

4 The amount and propriety of the Receiver’s very high fee request is not substantively 

briefed by any party and is therefore waived, except to the extent that on remand the fee 

ought to be reconsidered in light of this opinion. 

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11 

DISCUSSION

I. General Receivership Principles 

A district court has broad authority to place assets into receivership “to 

preserve and protect the property pending its final disposition.” Gordon v. 

Washington, 295 U.S. 30, 37, 55 S. Ct. 584 (1935); see also Gilchrist v. Gen. 

Elec. Capital Corp., 262 F.3d 295, 302 (4th Cir. 2001) (“the district court has 

within its equity power the authority to appoint receivers and to administer 

receiverships”) (citing Fed. R. Civ. P. 66). The primary purpose of the equitable 

receivership is the marshaling of the estate’s assets for the benefit of aggrieved 

investors and other creditors of the receivership entities. See SEC v. Hardy, 

803 F.2d 1034, 1038 (9th Cir. 1986). Receivers appointed by a federal court are 

directed to “manage and operate” the receivership estate “according to the 

requirements of the valid laws of the State in which such property is situated, 

in the same manner that the owner or possessor thereof would be bound to do 

if in possession thereof.” 28 U.S.C. § 959(b). 

In general, the Receiver has wide powers to acquire, organize and 

distribute the property of the receivership. A properly appointed receiver is 

“vested with complete jurisdiction and control of all [receivership] property 

with the right to take possession thereof.” 28 U.S.C. § 754. The Receiver is 

obliged to allocate receivership assets among the competing claimants 

according to their respective rights and, in this case, under the laws of Texas, 

where the Stanford Financial Group was headquartered. The district court 

ruled, in a 2009 order that was not appealed, that the insurance policies and 

proceeds are property of the estate subject to the court’s exclusive in rem

jurisdiction. 

Once assets have been placed in receivership, “[i]t is a recognized 

principle of law that the district court has broad powers and wide discretion to 

determine the appropriate relief in an equity receivership.” Safety Fin., 

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674 F.2d at 372–73 (citing SEC v. Lincoln Thrift Assoc., 577 F.2d 600, 606 (9th 

Cir. 1978)). This discretion derives not only from the statutory grant of power, 

but also the court’s equitable power to fashion appropriate remedies as 

“ancillary relief” measures. See SEC v. Wencke, 622 F.2d 1363, 1369 (9th Cir. 

1980). Courts have accordingly exercised their discretion to issue bar orders 

to prevent parties from initiating or continuing lawsuits that would dissipate 

receivership assets or otherwise interfere with the collection and distribution 

of the assets. See SEC v. Stanford Int’l Bank Ltd., 424 F. App’x 338, 340 (5th 

Cir. 2011) (“It is axiomatic that a district court has broad authority to issue 

blanket stays of litigation to preserve the property placed in receivership 

pursuant to SEC actions.”). Receivership courts, like bankruptcy courts, may 

also exercise discretion to approve settlements of disputed claims to 

receivership assets, provided that the settlements are “fair and equitable and 

in the best interests of the estate.” Ritchie Capital Mgmt., L.L.C. v. Kelley, 

785 F.3d 273, 278 (8th Cir. 2015) (citing Tri–State Fin., LLC v. Lovald, 

525 F.3d 649, 654 (8th Cir. 2008)). 

Neither a receiver’s nor a receivership court’s power is unlimited, 

however. See Whitcomb v. Chavis, 403 U.S. 124, 161, 91 S. Ct. 1858, 1878 

(1971) (“The remedial powers of an equity court must be adequate to the task, 

but they are not unlimited.”). Courts often look to the related context of 

bankruptcy when deciding cases involving receivership estates. The district 

court here acknowledged that the purpose of bankruptcy receiverships and 

equity receiverships is “essentially the same—to marshal assets, preserve 

value, equally distribute to creditors, and, either reorganize, if possible, or 

orderly liquidate.” Janvey v. Alquire, No. 3:09-cv-0724, 2014 WL 12654910, at 

*17 (N.D. Tex. July 30, 2014); see also SEC v. Wealth Mgmt. LLC, 628 F.3d 

323, 334 (7th Cir. 2010) (“The goal in both securities-fraud receiverships and 

liquidation bankruptcy is identical—the fair distribution of the liquidated 

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assets”). That their purpose is the same “makes sense” and reflects their 

shared legal heritage, since “federal equity receiverships were the predecessor 

to Chapter 7 liquidations and Chapter 11 reorganizations.” Alquire, 2014 WL 

12654910, at *17 (citing Duparquet Huot & Moneuse Co. v. Evans, 297 U.S. 

216, 221, 56 S. Ct. 412, 414 (1936)). The district court also recognized that “[i]n 

this particular case, the purpose and objectives of the receivership, as 

delineated in the Receivership Order, closely reflect the general purpose 

shared by the Bankruptcy Code and federal equity receiverships,” and it 

concluded that “[u]ltimately, this particular receivership is the essential 

equivalent of a Chapter 7 bankruptcy.” Id. at *18. 

Unfortunately, two interrelated limitations on the Stanford receivership 

were downplayed by the district court in its approval of the settlement and bar 

orders. Both derive from the broader principle that the receiver collects and 

distributes only assets of the entity in receivership. The first applies to the 

Receiver’s standing: “[l]ike a trustee in bankruptcy or for that matter the 

plaintiff in a derivative suit, an equity receiver may sue only to redress injuries 

to the entity in receivership, corresponding to the debtor in bankruptcy and the 

corporation of which the plaintiffs are shareholders in the derivative suit.” 

Scholes v. Lehmann, 56 F.3d 750, 753 (7th Cir. 1995) (emphasis added) (citing, 

inter alia, Caplin v. Marine Midland Grace Trust Co., 406 U.S. 416, 92 S. Ct. 

1678 (1972)). The Scholes case involved an SEC receivership, but Caplin, on 

which it relied, was a Supreme Court decision in a Chapter X reorganization 

case. This court endorsed the Scholes limitation as applied to this receivership 

in Janvey v. Democratic Senatorial Campaign Comm., Inc. (“DSCC”), 712 F.3d 

185, 190–93 (5th Cir. 2013). And following Caplin, a sister circuit held, “a 

trustee, who lacks standing to assert the claims of creditors, equally lacks 

standing to settle them.” DSQ Prop. Co., Ltd. v. DeLorean, 891 F.2d 128, 131 

(6th Cir. 1989); see also Wuliger v. Mfr’s. Life Ins. Co., 567 F.3d 787, 794 (6th 

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Cir. 2009) (“Because the receivership entities all would have lacked standing, 

and because of the rule that receivers’ rights are limited to those of the 

receivership entities, the Receiver also lacked standing [to sue for 

misrepresentations by brokers to defrauded investors].”). 

The second limitation, arising from the district court’s in rem 

jurisdiction, is that the court may not exercise unbridled authority over assets 

belonging to third parties to which the receivership estate has no claim. Put 

another way, in the course of administering this receivership, this district court 

previously rejected a broad reading of 28 U.S.C. § 754 that suggested the 

court’s in rem jurisdiction over the property would necessarily reach every 

claim relating to that property. See Rishmague v. Winter, No. 3:11-cv-2024-N, 

2014 WL 11633690, at *2 (N.D. Tex. Sept. 9, 2014). 

Thus, this court and others have held that a bankruptcy court may not 

authorize a debtor to enter into a settlement with liability insurers that enjoins 

independent third-party claims against the insurers. See, e.g., Matter of Zale 

Corp., 62 F.3d 746 (5th Cir. 1995) (refusing to countenance a bankruptcy 

court’s authority to enforce a settlement prohibiting third-party bad faith 

insurance claims because the claims were not property of the bankruptcy 

estate). Similarly, “if [the coinsureds’] portion of the [insurance] Proceeds is 

truly not property of the Estate, then the bankruptcy court has no authority to 

enjoin suits against the [coinsureds].” In re Vitek, 51 F.3d 530, 536 (5th Cir. 

1995); see also In re SportStuff, Inc., 430 B.R. 170, 175 (B.A.P. 8th Cir. 2010) 

(bankruptcy court lacked jurisdiction or authority to impair or extinguish 

independent contractual rights of vendors that were additional insureds under 

the debtor’s policies). As these cases illustrate, bankruptcy courts lack 

“jurisdiction” to enjoin such claims. 

The prohibition on enjoining unrelated, third-party claims without the 

third parties’ consent does not depend on the Bankruptcy Code, but is a maxim 

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of law not abrogated by the district court’s equitable power to fashion ancillary 

relief measures. Contrary to the Receiver’s assertion, the fact that the 

bankruptcy statute, 28 U.S.C. § 1334(b), limits jurisdiction to proceedings 

“arising in or related to” bankruptcy cases does not diminish the application of 

Zale or Vitek to equity receiverships. As noted, bankruptcy and equity 

receiverships share common legal roots.5 See In re Davis, 730 F.2d 176, 183–

84 (5th Cir. 1984) (the Bankruptcy Code arms bankruptcy courts with broad 

powers analogous to a court in equity). Moreover, to justify its decision denying 

bankruptcy court jurisdiction over third-party claims, the court in Zale quoted 

the Supreme Court in a civil rights class action case: “[o]f course, parties who 

choose to resolve litigation through settlement may not dispose of the claims 

of a third party, and a fortiori may not impose duties or obligations on a third 

party, without that party’s agreement. A court’s approval of a consent decree 

between some of the parties therefore cannot dispose of the valid claims of 

nonconsenting intervenors . . . .” Zale, 62 F.3d at 757 n.26 (citing Local No. 93 

v. City of Cleveland, 478 U.S. 501, 529, 106 S. Ct. 3063, 3079, (1986)).6 All of 

 

5 Modern bankruptcy reorganization law originated with Section 77B of the 

Bankruptcy Act of 1934, the purpose of which was to codify best practices in what had 

formerly been known as equity receiverships. See Duparquet Huot & Moneuse Co. v. Evans, 

297 U.S. 216, 222–24, 56 S. Ct. 412, 415–17 (1936). Section 77B(a), in turn, stated that the 

bankruptcy court’s powers are those “which a Federal court would have had it appointed a 

receiver in equity of the property of the debtor . . . .” Id. at 221, 56 S. Ct. at 415. 

6 Local No. 93 is merely one example of the Supreme Court’s rejection of the use of 

consent decrees to extinguish the claims of non-consenting third-parties, for “[a] voluntary 

settlement in the form of a consent decree between one [party] and [another party] cannot 

possibly ‘settle,’ voluntarily or otherwise, the conflicting claims of another group of [parties] 

who do not join in the agreement. This is true even if the second group of [parties] is a party 

to the litigation.” Martin v. Wilks, 490 U.S. 755, 755–68, 109 S. Ct. 2180, 2181–88 (1989). 

Indeed, “[a]ll agree” that “[i]t is a principle of general application in Anglo-American 

jurisprudence that one is not bound by a judgment in personam in a litigation in which he is 

not designated as a party or to which he has not been made a party by service of process.” Id.

(citing Hansberry v. Lee, 311 U.S. 32, 40, 61 S. Ct. 115, 117 (1940)). 

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this makes clear that it is not the subject matter or statutory limitations 

driving this limitation, and federal district courts have no greater authority in 

equity receiverships to ignore these bedrock propositions, because a “court in 

equity may not do that which the law forbids.” United States v. Coastal Ref. & 

Mktg., Inc., 911 F.2d 1036, 1043 (5th Cir. 1990). 

Rather than reckon with the limits on the Receiver’s standing and the 

court’s equitable power, the district court here cited an unpublished Fifth 

Circuit case, SEC v. Kaleta, No. 4:09-cv-3674, 2012 WL 401069, at *4 (S.D. Tex. 

Feb. 7, 2012), aff’d., 530 F. App’x. 360 (5th Cir. 2013), to support both the 

settlement and bar orders. Importantly, Kaleta is an unpublished, nonprecedential decision of this court. Not only that, but reading it as the district 

court and Appellees here advocate would mean investing the Receiver with 

unbridled discretion to terminate the third-party claims against a settling 

party that are unconnected to the res establishing jurisdiction. That is 

unprecedented. But Kaleta is in any event distinguishable and not 

inconsistent with the above-stated principles. In Kaleta, the bar order 

prevented defrauded investors from suing parties closely affiliated with the 

entity in receivership after the parties had agreed to make good on their 

guarantees to the receiver. Moreover, the settling parties would have been 

codefendants with receivership entities, leading to the possibility of their 

asserting indemnity or contribution from the estate. The court was forestalling 

a race to judgment that would have diminished the recovery of all creditors 

against receivership assets. That bar order protected the assets of the 

receivership estate, whereas the bar orders before us extend beyond 

receivership assets. 

The Receiver also contends that the district court may permanently 

enjoin the claims of non-consenting third parties based on general statements 

about ancillary powers found in SEC cases such as Wencke and Safety 

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Financial Services. We disagree. These cases stand only for the proposition 

that, in some circumstances, federal courts may use injunctive measures, such 

as stays, “where necessary to protect the federal receivership.” See Wencke, 

622 F.2d at 1370; Safety Fin. Serv., 674 F.2d at 372 n.5 (distinguishing Wencke, 

which “involved the much broader question of a federal court’s power to enjoin 

nonparty state actions against receivership assets.”) (emphasis added). In fact, 

the court in Wencke recognized that its holding was limited to the propriety of 

staying third-party “proceedings against a court-imposed receivership.” 

Wencke, 622 F.2d at 1371 (emphasis added). Correctly read, these cases 

explain that in rem jurisdiction over the receivership estate imbues the district 

court with broad discretion to shape equitable remedies necessary to protect 

the estate.7 They do not support that a district court’s in rem jurisdiction over 

the estate may serve as a basis to permanently bar and extinguish 

independent, non-derivative third-party claims that do not affect the res of the 

receivership estate. 

The Appellees emphasize the recent decision SEC v. DeYoung, 850 F.3d 

1172 (10th Cir. 2017), as supporting their argument that an equity court’s 

permanent bar order against third parties is appropriate when tied to a 

settlement that secures receivership assets. Like many of their arguments, 

however, this assertion proves too much. DeYoung is a narrow and deliberately 

fact-specific opinion. See DeYoung, 850 F.3d at 1182–83. The court approved 

a bar order preventing three defrauded IRA Account holders (out of over 5,500 

victims) from pursuing claims against the depository bank in which the 

accounts had been illegally commingled. Notably, however, the court 

demonstrated that (1) the claims of the barred investors precisely mirrored 

 

7 See also SEC v. Stanford Int’l Bank, Ltd., 424 F. App’x. 338, 340 (5th Cir. 2011) (“It 

is axiomatic that a district court has broad authority to issue blanket stays of litigation to 

preserve the property placed in receivership pursuant to SEC actions.”) (emphasis added). 

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claims that had been asserted and settled by the receiver; (2) averted a 

duplicative lawsuit whereby the bank could have asserted its contract right to 

indemnity from the receivership assets; and (3) provided the account holders 

with a claim against the receivership estate. The court simply channeled 

redundant claims into the receivership while preventing diminution of 

receivership assets. 

Returning to the broad issue in this case, whether the district court 

abused its discretion in approving the settlement and bar orders, there are two 

subparts to the question. The first is whether the district court’s equitable 

power to fashion ancillary relief could be used to bar claims by insureds to 

proceeds of the Underwriters’ policies, which are property within the 

receivership estate. The second is whether the court’s equitable power may be 

used to bar third-party claims, like tort or statutory claims, against the 

Underwriters but unconnected to the property of the Receivership. The 

answers to these questions vary according to the Appellants’ claims. Texas 

law, unless otherwise noted, applies by virtue of 28 U.S.C. § 959(b). 

II. Party Contentions 

a. Appellants Alvarado and McDaniel 

 The McDaniel and Alvarado Appellants are all former Stanford 

managers or employees who are being sued by the Receiver for clawbacks of 

their compensation via the Receiver’s Indirect Claims on the Underwriters’ 

policies. Appellants seek coverage under the insurance policies, which 

Underwriters have denied, to defend against these lawsuits and indemnify 

their losses. Appellants object to the settlement and bar orders on numerous 

grounds. From a practical standpoint, the settlement will exhaust the 

Underwriters’ policy proceeds, leaving these Appellants wholly uninsured 

against the Receiver’s lawsuits. The bar orders, moreover, prevent them from 

pursuing against the Underwriters not only breach of contract claims for 

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violating the duties to defend and indemnify, but also statutory and tort claims 

that, if successful, would not be paid from policy proceeds and would not reduce 

Receivership assets. 

The district court’s rejection of Appellants’ objections rested generally on 

its conclusion that the settlement and bar orders are fair, equitable, reasonable 

and in the best interests of the receivership estate. As has been noted, the 

court cited only the Kaleta case, affirmed by a non-precedential decision of this 

court, in support of its conclusions. The court’s reasoning invoked the 

perceived necessity of a settlement, together with the bar orders, to resolve 

fairly and efficiently the competing claims of the Receiver and Underwriters 

about policy coverage and assure the maximum recovery for Stanford’s 

defrauded investors. Without the bar orders, the court stated, Underwriters 

would not settle. The court pointedly refused to decide whether policy 

exclusions apply to the Appellants’ coverage claims. Even if such exclusions 

barred coverage, the court added, then the Receiver might also be barred by 

the same exclusions and all potential benefit of the settlement would be lost. 

In sum, the Appellants would lose out no matter what: their claims could be 

barred by exclusions, held uninsurable, or the Receiver, having the right to 

settle, would exhaust the proceeds first.8 The balance of benefits to the 

receivership estate against Appellants’ admitted losses weighed in favor of the 

court’s approving the settlement and bar orders. 

 

8 Implicit in the district court’s reference to the Receiver’s right to settle and exhaust 

all the policy proceeds is apparently its reliance on Texas law, which allows an insurer to 

settle with fewer than all of its co-insureds when the policy proceeds are insufficient to satisfy 

all of the claims. See G.A. Stowers Furniture Co. v. Am. Indem. Co., 15 S.W.2d 544 (Tex. 

1929); Pride Transp. v. Cont’l Cas. Co., 511 F. App’x 347, 351 (5th Cir. 2013); Travelers 

Indem. Co. v. Citgo Petroleum Corp., 166 F.3d 761, 765–68 (5th Cir. 1999); see also Tex. 

Farmers Ins. Co. v. Soriano, 881 S.W.2d 312, 315 (Tex. 1994). The court, however, never 

referenced these cases. 

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In the course of explaining its decision, however, the court made some 

errors. First, its broad statement that the settlement would fail without the 

bar orders did not account for the fact that the parties had mediated a prior 

settlement that required no bar orders against these Appellants because the 

Receiver had agreed to release all of its claims against them. “Global peace” 

there was achieved not by bar orders, but by the Receiver’s agreeing to drop 

the Indirect Claim suits. The final settlement required the broad bar orders 

only because the Receiver, for whatever reason, insisted that it must continue 

to pursue hundreds of clawback actions.9 The court’s broad statement also 

neglected to note that, despite the Receiver’s overall insistence to the contrary, 

the Receiver nonetheless released its claims against sixteen former Stanford 

officers and employees in the final settlement. 

Second, the court, perhaps inadvertently, did not address the fact that 

Appellants were foreclosed from sharing in the assets recovered by the 

Receiver by filing claims against the estate. 

Third, the court failed to distinguish between the Appellants’ two 

separate types of claims – contractual claims for defense and indemnity 

payable (if successful) from policy proceeds in competition with investors’ 

claims to the Receivership assets; and independent, non-derivative, thirdparty claims for tort and statutory violations, which would be satisfied (if 

successful) out of Underwriters’ assets. In this connection, the court also 

undervalued the Appellants’ claims for indemnity by disregarding PendergestHolt. In that case, this court held that the D&O policies should provide upfront reimbursement of defense costs in Stanford insureds’ criminal cases 

 

9 Indeed, when the Underwriters moved the district court to enforce the terms of the 

mediated settlement, their motion queried the benefits to be reaped, other than in the 

Receiver’s legal fees, from these time-consuming suits against relatively poor former 

employees targeted by the Receiver. 

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pending a separate judicial proceeding to resolve the coverage question. 

Pendergest-Holt v. Certain Und. at Lloyd’s of London, 600 F.3d 562, 572–74 

(5th Cir. 2010). Although carefully hedged, this decision offered Appellants 

the prospect of possible, temporary relief for their mounting defense costs and 

was not “wholly inapplicable” to the decision concerning the settlement and 

bar orders. But in any event, the court did not analyze the ramifications of 

Appellants’ distinct claims against Receivership assets and claims wholly 

independent of receivership assets. 

i. Contractual Claims for Defense and Indemnity 

 Reviewing first the settlement and bar of Appellants’ contractual claims 

against the policy proceeds that are property of the receivership estate, we find 

that the court abused its discretion by extinguishing Appellants’ claims to the 

policy proceeds, while making no provision for them to access the proceeds 

through the Receiver’s claims process. This undermines the fairness of the 

settlement. 

As the district court observed, some settlement with the Underwriters 

was prudent because of the sheer magnitude of claims far beyond the policies’ 

coverage, and because the scope of coverage, dependent on multiple, insuredspecific factual and legal questions, is unclear. What is clear in Texas law, as 

conceded by Appellants, is that an insurer may settle with fewer than all of its 

co-insureds when the policy proceeds are insufficient to satisfy all of the claims. 

See G.A. Stowers Furniture Co. v. American Indem. Co., 15 S.W.2d 544 (Tex. 

1929); Pride Transp. v. Continental Cas. Co., 511 F. App’x 347, 351 (5th Circuit 

2013); Travelers Indem. Co. v. Citgo Petroleum Corp., 166 F.3d 761, 765–68 

(5th Cir. 1999); see also Farmers Insurance Co. v. Soriano, 881 S.W.2d 312, 315 

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(Tex. 1994).10 Although the district court did not cite these cases, its ruling 

squares with them and supports its cost/benefit calculation for the 

Receiver/Underwriters’ settlement to the detriment of Appellants’ contractual 

claims. 

But not only did the settlement expressly foreclose the Appellants from 

sharing in the insurance policy proceeds of which they are coinsureds, the 

Appellants are not even allowed to file claims against the Receivership estate. 

Unlike the Stanford investors and the Receiver’s attorneys, who can pursue 

restitution through the Receiver’s claims process, Appellants have no access to 

the claims process. The Settlement Agreement specifically restricts payment 

of the Proceeds to the Receivers’ attorneys and the Stanford investors and 

specifically excludes Stanford employees and management, including 

Appellants. For these Appellants, should the Receiver continue to pursue 

them, their claims against the Underwriters offer the only avenue of recovery. 

This alone serves to distinguish this case from Kaleta, which approved the 

settlement because, inter alia, the settlement agreement “expressly permits” 

those affected by the bar order “to pursue their claims by ‘participat[ing] in the 

claims process for the Receiver's ultimate plan of distribution for the 

Receivership Estate.’” See Kaleta, 530 F. App’x at 362–63 (alteration in 

original). Barring Appellants’ claims to coverage under their insurance 

policies by claiming the proceeds of these policies as property of the 

Receivership, and then barring Appellants’ from accessing even a portion of 

these proceeds through the Receivership claim process, undermines the 

fairness of the settlement. 

 

10 Soriano may not squarely apply to the extent that the settlement does not, on its 

face, exhaust the policy limits. But this uncertainty in the law meant that settlement 

between the Receiver and the Underwriters was fair game. 

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The district court and Receiver lacked authority to dispossess claimants 

of their legal rights to share in receivership assets “for the sake of the greater 

good.” The court’s duty, as previously described, is to assure that all claimants 

against the Receivership have a reasonable opportunity to share in the estate’s 

assets. Given the numerous exclusions to policy coverage,11 the Appellants’ 

entitlement to proceeds may appear weak, but the court disclaimed deciding 

coverage issues, and the Appellants have identified several reasons, in addition 

to Pendergest-Holt, why their contractual claims might prevail on final 

adjudication.12

Rather than extinguish the Appellants’ contractual claims, the court 

could have authorized them to be filed against the Receivership in tandem with 

the Stanford investors’ claims. Such “channeling orders” are often employed 

to afford alternative satisfaction to competing claimants to receivership assets 

while limiting their rights of legal recourse against the assets. See, e.g., 

DeYoung, 850 F.3d at 1182; see also Kaleta, 530 F. App’x at 360 (approving 

claims filing in receivership for barred litigants). In any event, the court may 

have intended to channel the Appellants’ claims here but simply overlooked 

their omission from the extant procedures.13

 

11 The myriad of contested policy exclusions include the insured versus insured, money 

laundering, fraud, intentional corporate or business policy, and prior knowledge exclusions. 

12 Appellants explain that a significant number of their group have no personal 

liability, and, inferentially, should not be subject to policy exclusions, because they did not 

sell Stanford CDs to investors. Further, because the Receiver’s claims against the Appellants 

are not derivative, any recovery from the proceeds would not at all reduce or offset the 

Appellants’ liability for fraudulent transfers. Finally, Appellants assert viable defenses to 

the clawback actions based, in part, on Texas law in this Receivership. See Janvey v. Golf 

Channel, Inc., 487 S.W.3d 581, 582 (Tex. 2016) (recognizing defense to fraudulent transfer of 

reasonably equivalent value received). 

13 The Receiver and Underwriters contend that in lieu of other modes of compensation 

through the receivership, these Appellants have received “benefits,” however small, from the 

settlement because the insurance proceeds that have gone into the receivership estate offset 

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000452

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No. 17-10663 

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ii. Extracontractual Claims for Tort and Statutory Violations 

 By ignoring the distinction between Appellants’ contractual and 

extracontractual claims against Underwriters, the district court erred legally 

and abused its discretion in approving the bar orders.14 These claims, 

including common law bad faith breach of duty and claims under the Texas 

Insurance Code, lie directly against the Underwriters and do not involve 

proceeds from the insurance policies or other receivership assets.15 These 

damage claims against the Underwriters exist independently; they do not arise 

from derivative liability nor do they seek contribution or indemnity from the 

estate.16 As the preceding discussion explains in detail, receivership courts 

have no authority to dismiss claims that are unrelated to the receivership 

estate. That the district court was “looking only to the fairness of the 

settlement as between the debtor and the settling claimant [and ignoring thirdparty rights] contravenes a basic notion of fairness.” Zale, 62 F.3d at 754 

 

their potential liability in the Receiver’s and other suits. The district court made no such 

finding, and we see no basis in the record for it. 

14 The Receiver and Underwriters would pretermit any such distinction by contending 

that unless the Appellants had valid contractual claims for insurance from the Underwriters’ 

policies, they could not bring extracontractual claims. This may well be accurate. The 

district court, however, refused to rule on the viability of Appellants’ contractual claims, and 

we need not undertake that task here. The basis of settlement for all concerned is to avoid 

tedious litigation of insurance coverage claims. 

15 This principle has been described above in the related context of bankruptcy. See 

Matter of Zale Corp., 62 F.3d 746, 756–57 (5th Cir. 1995); Matter of Vitek, Inc., 51 F.3d 530, 

538 (5th Cir. 1995); In re Sportstuff, Inc., 430 B.R. 170, 178–79 (B.A.P. 8th Cir. 2010); see also 

Matter of Buccaneer Res., LLC, 912 F.3d 291, 293–97 (5th Cir. 2019) (explicating the 

difference between derivative and non-derivative injuries and holding that a tortious 

interference claim by a former company president against the outside lenders is nonderivative and separate from the bankruptcy estate). 

16 See SEC v. DeYoung, 850 F.3d 1172; In re Heritage Bond Litig., 546 F.3d 667, 680 

(9th Cir. 2008) (discussing settlement of a securities class action and distinguishing between 

claims for codefendant contribution and independent claims against settling defendants; 

former could be dismissed by bar order, but latter claims could not be). 

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000453

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No. 17-10663 

25 

(alteration in original) (citing United States v. AWECO, Inc., 725 F.2d 293, 298 

(5th Cir.)). 

 As discussed above, the Receiver lacked standing to settle independent, 

non-derivative, non-contractual claims of these Appellants against the 

Underwriters. See DSCC, 712 F.3d at 190, 193 (receiver “has standing to 

assert only the claims of the entities in receivership, not the claims of the 

entities’ investor-creditors [coinsureds] . . .”). Of course, the Receiver and 

Underwriters were, as Appellants’ counsel colorfully described, all too happy 

to compromise at the expense of Appellants’ rights. The court purported to 

justify this result by claiming that “the bar orders are not settling claims, they 

are enjoining them.” No matter the euphemism, a permanent bar order is a 

death knell intended to extinguish the claims, which are a property interest, 

however valued, of the Appellants. 

Moreover, in approving the settlement and bar orders against these 

Appellants, the district court overlooked problems inherent in the settling 

parties’ positions. The Underwriters’ position was in conflict with the 

Appellants: by means of the bar orders, the Underwriters limited their 

exposure to further costly and time-consuming litigation over Appellants’ nonderivative extracontractual claims against them. The Receiver was enabled by 

the settlement and bar orders to place Appellants in a vise: preserving his 

ability to sue Appellants for clawbacks even as the agreement stripped 

Appellants’ access to any recompense from the Underwriters.17 These 

 

17 The mediated settlement, in contrast, averted these conflicts of interest with the 

Receiver’s release of claims against Appellants offsetting the Underwriters’ potential 

extracontractual liability. 

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000454

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No. 17-10663 

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problems cast grave doubt on the fairness and equity of the settlement and bar 

orders reached without Appellants’ participation.18

In sum, although we sympathize with the impetus to settle difficult and 

atomized issues of insurance coverage rather than dissipate receivership 

assets in litigation, the settlement and bar orders violated fundamental limits 

on the authority of the court and Receiver. The court and Receiver could not 

abrogate contractual claims of these Appellants to proceeds of Underwriters’ 

policies without affording them an alternative compensation scheme similar, 

if not identical, to the claims process for Stanford investors. The court could 

not authorize the Receiver and Underwriters to compromise their differences 

while extinguishing the Appellants’ extracontractual claims against 

Underwriters. Equity must follow the law, which here constrains the court’s 

and Receiver’s authority to protecting the assets of the receivership and claims 

directly affecting those assets.19

b. Appellant Cordell Haymon 

Like the Alvarado and McDaniel Appellants, Appellant Cordell Haymon, 

a member of Stanford Trust Company’s board of Directors, was targeted by the 

 

18 When compared with DeYoung, 850 F.3d at 1182–83, the unsustainability of the 

settlement and bar orders here is manifest. Unlike that case, the extracontractual claims of 

these Appellants do not parallel those of the Receiver, Underwriters possess no 

contribution/indemnity claim against the receivership estate, and Appellants have been 

provided no channel to assert claims in the receivership. 

19 We reject Appellants’ due process claims against the settlement and bar orders. 

They contend that because they “had an interest in” the outcome of the settlement, and the 

Bar Order “fully and finally adjudicates Appellants’ independent state law contract and tort 

claims,” due process required at least the ability to introduce evidence at the hearing. 

McDaniel presses other constitutional claims. But Appellants were provided notice of the 

settlement hearing, were able to fully brief their position and provide affidavits, and they 

have offered nothing more on appeal. Although excluded from the settlement negotiations, 

they have shown no legal requirement that they be allowed to participate in a settlement 

resolving claims for reimbursement against the limited policy proceeds. The applicable Texas 

law allows insurers to settle with fewer than all of the insureds in such circumstances. 

Appellants’ due process arguments fail, and McDaniel’s other claims are meritless. 

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000455

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Receiver and sought coverage of his defense costs under the insurance policies. 

After the Underwriters denied his claim for coverage, he settled the Receiver’s 

fiduciary duty breach suit for $2 million. Haymon asserts that he relied on the 

language of his settlement agreement, which specifically authorized the 

continuation of his suit against the Underwriters. Only a few months later, 

however, the final proposed settlement undid his expectations of recovery from 

the Underwriters. Haymon requested to intervene in the initial coverage 

dispute between Underwriters and the Receiver, and he filed objections to the 

proposed settlement. He argues now that the district court erred in barring all 

of his contractual and extracontractual tort and statutory claims against the 

Underwriters. 

To the extent that Haymon’s claims mirror those of Alvarado and 

McDaniel, the same results follow. The district court acted within its authority 

to bar Haymon’s claim for contractual defense and indemnity under the 

insurance policies, but some alternate compensation mode from the 

receivership estate is required, and the court could not bar his extracontractual 

claims against the Underwriters. However, the ultimate evaluation of 

Haymon’s claims may differ from that of the other Appellants for two reasons, 

which the district court should assess on remand. First, because his insurance 

coverage claim was liquidated before the final settlement ($2 million potential 

indemnity and $1.5 million defense costs) it was ripe for judicial determination 

under Pendergest-Holt.20 Second, Haymon received a bar order, perhaps 

valuable to him, against any further litigation concerning his involvement with 

Stanford entities. 

 

20 Finally, as noted in regard to the other Appellants, Haymon was afforded the 

opportunity, and availed himself of the ability to press his constitutional objections to the 

settlement and bar orders. There was no failure of due process and his other vaguely 

identified constitutional objections are meritless. 

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000456

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No. 17-10663 

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c. Appellant Louisiana Retirees 

 Unlike the foregoing Appellants, the Louisiana Retirees are not 

coinsureds under the insurance policies, and they are not being pursued in 

Indirect Claim actions by the Receiver. Retirees have assiduously pursued 

securities law claims against certain Stanford brokers and the Underwriters, 

as insurers for those brokers, under the Louisiana Direct Action Statute, La. 

R.S. 22:1269. 

 First, the parties dispute the meaning of the bar order and the extent to 

which it bars the Retirees’ claims. The Receiver argues that the bar order 

applies only to claims against the Underwriters and the Underwriters’ 

Released Parties, defined as the officers, agents, etc. of Underwriters, and 

expressly excluding the officers, directors, or employees of Stanford Entities. 

Retirees argue that it enjoins them from pursuing the Stanford Claims, defined 

as “any action, lawsuit or claims brought by any Stanford Investor against 

Underwriters [or] . . . Underwriter’s Insureds.” In turn, Underwriters’ 

Insureds are defined as “any person that shall be an officer and director of any 

Stanford Entities . . . [or] any employee of any Stanford Entities.” On remand, 

it would be appropriate for the district court to determine and clarify the 

meaning of the bar order as to the Retirees, keeping in mind that the district 

court may not enjoin any claims by Retirees against the brokers that do not 

implicate the policy proceeds. 

 Second, the Retirees’ claims under the Louisiana direct action statute 

unequivocally implicate the policy proceeds and therefore assets of the 

receivership. The statute specifies that an action can be brought “within the 

terms and limits of the policy by the injured person.” La. Rev. Stat. 22:1269(A), 

(C), (D). It “does not create an independent cause of action against the 

insurer[;] it merely grants a procedural right of action against an insurer where 

the plaintiff has a substantive cause of action against the insured.” Soileau v. 

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000457

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Smith True Value & Rental, 144 So. 3d 771, 780 (La. 2013). As such, the 

Receiver could settle with the Underwriters notwithstanding the direct action 

claim just as he could settle regardless of the Employee Appellants’ contractual 

claims to policy proceeds. Further, as former investors in the Stanford entities, 

the Retirees were afforded a means of filing claims apart from the direct action 

suit, and many have availed themselves of that opportunity. Consequently, 

the Retirees’ direct action suit against the Underwriters amounts to a 

redundant claim on receivership assets. 

 Nevertheless, the Retirees assert several arguments that have no 

bearing on the permissibility of the settlement and bar order as to them. They 

contend first that the settlement and bar order conflict with the Supreme 

Court’s decision in Chadbourne & Parke LLP v. Troice, 134 S. Ct. 1058 (2014), 

which they characterize as “acknowledg[ing] the Louisiana Retirees’ rights to 

bring their state law securities claims in Louisiana state court.” But Troice

held only that the Securities Litigation Uniform Standards Act did not preempt 

the Louisiana Appellants’ state court claims. The Court’s ruling did not bear 

on the merits of or procedure for the Retirees’ state law case. 

Second, they contend that DSCC, 712 F.3d at 185, forbids giving the 

receiver the right to “control the settlement of a claim it does not own.” That 

is certainly correct according to our previous discussion, but here, the Receiver 

had standing to pursue its own claims as coinsured under the Underwriters’ 

policies, such claims perfected the Receiver’s interest in a valuable asset, and 

Texas law provided the right to settle them even at the expense of the Retirees’ 

direct action claims. 

 The Retirees argue that the district court should have first determined 

the disputed legal questions about the magnitude of, and legal rights to, the 

policy proceeds before approving the settlement and bar orders under In re 

Louisiana World Exposition, Inc., 832 F.2d 1391 (5th Cir. 1987). This 

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argument simply misreads that case. The court in Louisiana World explicitly 

distinguished the facts before it from cases involving coinsureds with equal 

claims to the policy proceeds. Moreover, at least one disputed policy – the 

Fidelity Bond – covers only the Receivership entities.21 It was not an abuse of 

discretion for the district court to hold that equity favored avoiding costly 

litigation and dissipation of receivership assets by allowing the Receiver, a 

coinsured with equal claim to the policy proceeds, to settle with the 

Underwriters. Avoiding protracted legal examination of the policy exclusions, 

which could just as easily bar Retirees and others from the policy proceeds, 

was precisely the point of the settlement. 

Fourth, Retirees assert that the Anti-Injunction Act, 28 U.S.C. § 2283 

(“AIA”), prevented the court from issuing its bar orders. This argument has no 

merit. Under the AIA, “any injunction against state court proceedings 

otherwise proper under general equitable principles must be based on one of 

the specific statutory exceptions to [the Anti-Injunction Act] if it is to be 

upheld.” Atl. Coast Line R.R. Co. v. Bhd. of Locomotive Eng’rs, 398 U.S. 281, 

287, 90 S. Ct. 1739, 1743 (1970). The specific exceptions are express 

authorization by an Act of Congress, where necessary in aid of the court’s 

jurisdiction, or to protect or effectuate the court’s judgments. Id. at 288, 

90 S. Ct. at 1743–44. The AIA does not prohibit the settlement and bar order 

because, pertinent to the Retirees, they cover only those claims implicating the 

insurance policy proceeds and so were necessary in aid of the district court’s 

jurisdiction over those proceeds. The district court has exclusive in rem 

jurisdiction over the policy proceeds and permanent bar orders have been 

approved as parts of settlements to secure receivership assets. See, e.g., SEC 

 

21 As with the other policies, the Underwriters and Receiver dispute the scope of 

coverage and exclusions of the Fidelity Bond, and whether the Receiver may access the 

proceeds, but there is no argument that the Retirees may access these proceeds. 

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000459

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v. Parish, No. 2:07-CV-00919-DCN, 2010 WL 8347143 (D.S.C. Feb. 10, 2010) 

(“[T]he bar order is necessary to preserve and aid this court’s jurisdiction over 

the receivership estate, such that the Anti-Injunction Act would not prohibit 

the bar order even if there were pending state court actions, which there are 

not.”). 

For these reasons, the settlement and bar orders did not interfere with 

or improperly extinguish the Retirees’ rights. 

CONCLUSION

 For the foregoing reasons, we VACATE the district court’s orders 

approving the settlement and bar orders and REMAND for further 

proceedings consistent with this opinion.22

 

22 Vacatur and remand will probably necessitate the court’s reconsideration of the 

attorneys’ fee award to the Receiver’s counsel. 

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000460

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EXHIBIT

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000461

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JOINDER IN MOTION FOR STAY PENDING APPEAL PAGE 1OF 5 

D. Michael Lynn – State Bar ID 12736500 

John Y. Bonds, III – State Bar ID 02589100 

Clay M. Taylor – State Bar ID 24033261 

Bryan C. Assink – State Bar ID 24089009 

BONDS ELLIS EPPICH SCHAFER JONES LLP 

420 Throckmorton Street, Suite 1000 

Fort Worth, Texas 76102 

(817) 405-6900 – Telephone 

(817) 405-6902 – Facsimile 

Michael.lynn@bondsellis.com

john@bondsellis.com 

clay.taylor@bondsellis.com

bryan.assink@bondsellis.com

COUNSEL FOR JAMES DONDERO 

IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE NORTHERN DISTRICT OF TEXAS 

DALLAS DIVISION 

In re: § Case No. 19-34054-SGJ-11 

 § 

HIGHLAND CAPITAL MANAGEMENT, L.P., § 

 § Chapter 11 

 § 

 Debtor. § 

JOINDER IN MOTION FOR STAY PENDING APPEAL AND ADDITIONAL 

GROUNDS FOR THE ISSUANCE OF A STAY PENDING APPEAL 

 James Dondero (“Dondero”) herby files his Joinder to Highland Capital Management Fund 

Advisors, L.P. and NexPoint Advisors, L.P.’s Motion for Stay Pending Appeal of the Confirmation 

Order, and Brief In Support Thereof (the “Advisor Motion”), and also submits his Additional 

Grounds for the Issuance of a Stay Pending Appeal.1

Joinder 

 1. First, Dondero joins and incorporates by reference each of the points, facts, legal 

analysis and standards made by the Movants in the Advisor Motion. 

1

 Defined terms not defined herein have the same terms ascribed to them in the Advisor Motion. 

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 ̈1¤}HV5#$ 'd«

1934054210304000000000007

Docket #1973 Date Filed: 03/04/2021

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000462

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JOINDER IN MOTION FOR STAY PENDING APPEAL PAGE 2OF 5 

Additional Facts Relevant to this Joinder 

 2. During the course of this bankruptcy case, and after Dondero was removed from 

his role at the Debtor, the Debtor or its subsidiaries, under the direction of the Debtor’s CEO 

James Seery, sold three substantial assets. Those three assets sales were generically referred to 

as the Life Settlements sale, the Omnimax sale and the Trussway or SSP sale (collectively the 

“Sales”). 

 3. In each of the Sales, the sale of the assets that occurred was not actually carried 

on the balance sheet of the Debtor itself, but instead on the balance sheet of a subsidiary or a 

subsidiary of a subsidiary. Each Sale was significant and in excess of $2,000,000. 

 4. The Debtor did not provide notice of the Sales to creditors or parties-in-interest. 

 5. The Debtor further maintains that notice of the Sales was not required. For the 

reasons stated below, the Debtor is mistaken. 

Additional Support for Issuance of a Stay Pending Appeal 

6. As additional grounds and argument as why a stay should issue, as stated in 

Dondero’s Objection to the Plan and as argued at the confirmation hearing on the same, the Debtor 

failed to meet its burden proving that the best interests of the creditors test had been met by 

showing that creditors and other parties in the waterfall (such as equity) would receive as much as 

they would have in a hypothetical chapter 7 case. This objection was, in part, based on the 

Debtor’s repeated refusal, even while in bankruptcy, to afford creditors and parties-in-interest, 

such as Dondero, notice and opportunity to participate in sales of the Debtor’s assets. One of the 

numerous reasons for the requirements under the Bankruptcy Code and Rules that notice of such 

sales be provided is so that any creditor, or any other interested party, could participate in the sales 

process and thereby ensure that the estate (and other stakeholders) can reasonably anticipate that 

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000463

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JOINDER IN MOTION FOR STAY PENDING APPEAL PAGE 3OF 5 

the highest and best sales price(s) for any asset(s) being sold was indeed reached for the sale of 

that asset. Absent a stay pending appeal, Dondero and other parties-in-interest would lose the 

protections offered by the notice procedures for the sale of assets provided for under 11 U.S.C. 

Section 363 and Federal Rule of Bankruptcy Procedure 2002. 

7. The Debtor maintains that while it did not give notice to Dondero of prior sales in 

bankruptcy, that it did not have to. Dondero reasonably assumes that the Debtor may continue 

such practice even if a stay was granted. As a result, the imposition of the stay is not material to 

the Debtor and does no harm to it. 

8. Alternatively, if the Debtor now acknowledges that under the Bankruptcy Code and 

Rules notice should have been provided and that any subsequent similar sale would need to be 

noticed out in accordance with Section 363 and Rule 2002, then the additional burden to do so is 

not material to the Debtor, better insures that creditors and parties-in-interest are both informed 

and their interests are protected, and informs both this Court and the court hearing the appeal of 

this matter additional evidence of why this underlying appeal should be granted. 

9. First, the argument used to justify the prior lack of compliance with the Code and 

the Rules of “the assets that were being sold were assets of a subsidiary entity and therefore not 

assets of the estate,” and therefore not implicating the notice provisions of Section 363 and Rule 

2002, is specious and self-serving. At times in this case, the Debtor has maintained that the 

subsidiaries are subject to ultimate control of and by this Court and proceeding, but at other times 

it chooses to assert their independence from the obligations that come commensurate with that 

assertion. 

10. All the Sales done in this bankruptcy were significant sales, not conducted within 

the ordinary course of business of the Debtor, and necessarily positively or negatively impacted 

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000464

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JOINDER IN MOTION FOR STAY PENDING APPEAL PAGE 4OF 5 

the recoveries that creditors and parties-in-interest will ultimately realize in this case. In short, the 

Debtor knew exactly what it was doing, violated the Code and the Rules, but proceeded with the 

Sales despite these infirmities. 

11. Moreover, the argument misses the point. If a stay were granted, and if the Debtor 

continued to operate in such a manner avoiding what Dondero maintains are fundamental and 

applicable protections of both bankruptcy statute and rule, and the appeal was subsequently 

granted in whole or in part on such grounds, and also on the third-party releases and exculpation 

grounds, then the parties responsible for such violations of the Bankruptcy Code and Rules could 

be held responsible for such acts and the creditors and parties-in-interest could seek recompense. 

Absent a stay pending appeal, the public interests are harmed by allowing the Debtor to continue 

to skirt its duties about providing due notice of sales of the Debtor’s assets under a plan that may 

be subsequently overturned if the appeal is granted. The imposition of a stay would not alter the 

Debtor’s ability to actually sell assets, but would at least make it either provide notice of such 

sales, or, if it chooses not to, make the Debtor responsible for the consequences of its actions if 

that decision is an erroneous one. This is precisely why a stay should be grated to keep irreparable 

harm from being done to creditors and parties-in-interest such as Dondero. 

12. Therefore, the issuance of stay pending appeal affords: (i) at least some marginal 

protections to the creditors and parties-in-interest that the Bankruptcy Code provisions should be 

adhered to regarding sales of assets; and (ii) if it is ultimately found that such lack of notice is and 

was indeed proper, then the issuance of a stay does no practical harm to the Debtor who can 

continue its practices of not providing such notice. 

 

Case 19-34054-sgj11 Doc 1973 Filed 03/04/21 Entered 03/04/21 17:34:17 Page 4 of 5

Appx. 0380

Case 3:21-cv-01710-N Document 10-12 Filed 10/05/21 Page 5 of 6 PageID 434

Case 22-03052-sgj Doc 10-12 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 12 Page 5 of 6

000465

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 207 of 208 PageID 535
JOINDER IN MOTION FOR STAY PENDING APPEAL PAGE 5OF 5 

Request for Relief 

Dondero requests that the Court enter an Order: 

(i) Staying the effectiveness of the Confirmation Order pending appeal; and 

(ii) granting such other relief as is just and proper. 

Signed: March 4, 2021. 

 BONDS ELLIS EPPICH SCHAFER JONES LLP 

 By: /s/ Clay M. Taylor____________ 

 D. Michael Lynn – State Bar ID 12736500 

John Y. Bonds, III – State Bar ID 02589100 

Clay M. Taylor – State Bar ID 24033261 

Bryan C. Assink – State Bar ID 24089009 

 Telephone: (817) 405-6900 

 Facsimile: (817) 405-6902 

 Email: clay.taylor@bondsellis.com

 ATTORNEYS FOR JAMES DONDERO 

CERTIFICATE OF SERVICE

 The undersigned hereby certifies that, on this on March 4, 2021, true and correct copies 

of this document were electronically served by the Court’s ECF system on parties entitled to 

notice thereof, including on counsel for the Appellee. 

 By: /s/ Clay M. Taylor____________ 

 Clay M. Taylor 

Case 19-34054-sgj11 Doc 1973 Filed 03/04/21 Entered 03/04/21 17:34:17 Page 5 of 5

Appx. 0381

Case 3:21-cv-01710-N Document 10-12 Filed 10/05/21 Page 6 of 6 PageID 435

Case 22-03052-sgj Doc 10-12 Filed 05/25/22 Entered 05/25/22 17:52:21 Desc

Exhibit 12 Page 6 of 6

000466

Case 3:22-cv-02280-S Document 3-3 Filed 12/06/22 Page 208 of 208 PageID 536