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PACHULSKI STANG ZIEHL & JONES LLP

Jeffrey N. Pomerantz (pro hac vice pending) 

John A. Morris (pro hac vice pending) 

Gregory V. Demo (pro hac vice pending) 

Hayley R. Winograd (pro hac vice pending) 

10100 Santa Monica Blvd., 13th Floor

Los Angeles, CA 90067

Tel: (310) 277-6910

Fax: (310) 201-0760

HAYWARD PLLC

Melissa S. Hayward

Texas Bar No. 24044908

MHayward@HaywardFirm.com

Zachery Z. Annable

Texas Bar No. 24053075

ZAnnable@HaywardFirm.com

10501 N. Central Expy, Ste. 106

Dallas, Texas 75231

Tel: (972) 755-7100

Fax: (972) 755-7110

Counsel for Highland Capital Management, L.P.

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE NORTHERN DISTRICT OF TEXAS

DALLAS DIVISION

In re:

HIGHLAND SELECT EQUITY FUND GP, L.P.,

Debtor. 

)

) 

) 

) 

) 

) 

)

Chapter 7 

Case No. 23-31039-mvl7

HIGHLAND CAPITAL MANAGEMENT, L.P.’S RESPONSE AND JOINDER TO 

MOTION TO TRANSFER/REASSIGN CASE

Highland Capital Management, L.P. (“HCMLP”), a creditor and party-in-interest in the 

above-referenced bankruptcy case, by and through its undersigned counsel, hereby files its 

response to Creditor The Dugaboy Investment Trust’s Objection to Debtor’s Motion to Transfer

[Docket No. 20] and joinder to Debtor’s Motion to Transfer/Reassign Case [Docket No. 9] (the 

“Motion”) filed by Highland Select Equity Master Fund, L.P. (the “Select Fund”) and Highland 

Select Equity Fund GP, L.P. (“Select GP,” and together with the Select Fund, the “Debtors”). In 

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support of thereof, HCMLP adopts the legal arguments and authorities in the Motion and 

respectfully states as follows: 

PRELIMINARY STATEMENT1

1. The Debtors’ cases are directly related to and intertwined with the HCMLP Case 

and should therefore be re-assigned to Judge Jernigan, the judge who has overseen the HCMLP 

Case since it was transferred to her court in December 2019. 

2. HCMLP is one of the Debtors’ two creditors. It is indisputable that HCMLP is

indirectly the sole limited partner of the Select Fund and owner of Select GP and that the Debtors 

act through HCMLP. The Debtors’ only other purported creditor is Dugaboy, James Dondero’s 

family trust which he controls and of which he is the lifetime beneficiary. 

3. Regrettably, Dugaboy has intimated that it intends to investigate (and then pursue)

baseless claims against HCMLP, its court-appointed CEO, James P. Seery, Jr., and its other 

employees arising from acts occurring during the HCMLP Case. While any such investigation (let 

alone the pursuit of claims) would be a waste of resources, the mere possibility of such an 

investigation mandates re-assignment of the Debtors’ cases to Judge Jernigan because:

• Any such claims would relate to conduct that occurred during the HCMLP Case and was

(and still is) subject to Judge Jernigan’s oversight; 

• Judge Jernigan is thoroughly familiar with provisions of HCMLP’s confirmed Plan that 

will likely apply here, including the discharge and gatekeeper provisions, as well as other 

applicable orders and deadlines in the HCMLP Case such as the Admin Bar Date; and 

• If Dugaboy ever pursues claims against HCMLP or its employees (including Mr. Seery) 

for conduct arising during the HCMLP Case, Dugaboy would be required pursuant to

various “gatekeeper” orders to obtain Judge Jernigan’s approval before commencing suit. 

4. If these facts were not enough—and they are—Dugaboy previously admitted that 

any purported claim it has against HCMLP for acts concerning the Debtors must be raised in the 

1 All capitalized terms used, but not defined, in this Preliminary Statement have the meanings given to them below.

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HCMLP Case. In April 2020, Dugaboy filed a proof of claim in the HCMLP Case seeking to hold 

HCMLP liable for the Debtors’ alleged obligations to Dugaboy. In response to HCMLP’s 

objection to Dugaboy’s claim, Dugaboy acknowledged that HCMLP’s “Plan, as part of the 

gatekeeper provision in the Plan, vests exclusive jurisdiction of the claim of Dugaboy against” the 

Select Fund in Judge Jernigan’s court. HCMLP Case Docket No. 2933 ¶ 5. Notably, Judge 

Jernigan ultimately disallowed Dugaboy’s claim against HCMLP arising from its management of 

the Debtors with prejudice—thereby raising even more issues of judicial estoppel, collateral 

estoppel, and res judicata.

5. Separately, Mr. Dondero, through yet another controlled shell entity (i.e., PCMG), 

commenced an action against HCMLP (this time, in the District Court) for alleged mismanagement 

of the Debtors. After the matter was referred to the Bankruptcy Court and HCMLP moved to 

dismiss, PCMG stipulated to the dismissal of the adversary proceeding with prejudice.

6. Regrettably, HCMLP believes that Dugaboy (and Mr. Dondero) will attempt to use 

the Debtors’ bankruptcy cases as the latest vehicle to pursue baseless claims against HCMLP and 

its management and employees—even though any purported claims are barred for myriad reasons 

and would be subject to the Gatekeeper in HCMLP’s Plan in any event. Such suits will 

indisputably affect HCMLP’s bankruptcy estate and implicate the terms of HCMLP’s Plan. 

Judicial economy therefore favors re-assigning these cases to Judge Jernigan as she will be 

involved in their management under any circumstances.

7. Despite the foregoing, Dugaboy has objected to re-assignment. The objection is 

ill-founded. The connections between these cases and the HCMLP Case are stark, indisputable, 

and dispositive. But Dugaboy objects to transfer solely because it dislikes Judge Jernigan, not 

because she is “biased” as they claim but because she understands Mr. Dondero’s games—

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litigation as harassment. That is what is going on here. In fact, HCMLP offered to waive its claim 

against the Debtors and allow Dugaboy, the Debtors’ only other creditor, to have all of the Debtors’ 

cash and investments to resolve these cases, after payment of estate expenses. Dugaboy never 

responded to HCMLP’s offer (reiterated on the record before Judge Jernigan) but chose instead to 

propound more litigation. 

JOINDER

I. Background to the Select Fund

8. The Select Fund is a Bermuda-based limited partnership that is managed by its 

general partner, Select GP. HCMLP is indirectly the sole limited partner of the Select Fund2 and 

the owner of Select GP. The Select Fund’s former investment manager was HCMLP. Prior to the 

filings, the Debtors had no employees and could act only through HCMLP. 

9. Prior to HCMLP’s bankruptcy in October 2019, James Dondero, a founder of 

HCMLP and its former Chief Executive Officer, controlled the Select Fund, Select GP, HCMLP, 

and Dugaboy. 

10. Historically, the Select Fund had one asset: a prime brokerage account with 

Jefferies, which held a portfolio of liquid and illiquid securities (the “Jefferies Account”). The 

Select Fund was managed by HCMLP, then under the control of Mr. Dondero, and securities would 

be bought and sold in the Jefferies Account at Mr. Dondero’s direction. Mr. Dondero also directed 

the Select Fund to borrow money from Jefferies on margin. The loans Mr. Dondero obtained from 

Jefferies were secured by the securities in the Jefferies Account and the proceeds were used to 

2 The Select Fund has one limited partner: Highland Select Equity Fund, L.P. (“Equity Fund”). Equity Fund is 100% 

owned by the Highland Claimant Trust. Prior to February 2021, PCMG Trading Partners XXIII, L.P. (“PCMG”), 

held a 0.024% limited partnership interest in Equity Fund. PCMG’s limited partners are Mr. Dondero and Mark 

Okada, HCMLP’s co-founder. Mr. Dondero holds 75% of PCMG’s limited partnership interest and Mr. Okada holds

the remainder. PCMG’s general partner is Strand Advisors III, Inc., which is 100% owned and controlled by Mr. 

Dondero. PCMG’s interest in Equity Fund was redeemed for cash in February 2021. 

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purchase more securities, which in turn were pledged to Jefferies. Mr. Dondero historically caused 

the Select Fund to borrow as much as was allowed against the securities in the Jefferies Account.

11. The Debtors have two creditors. HCMLP loaned the Select Fund $3 million (with 

the consent of the Committee) in March 2020 (the “HCMLP Loan”) with the proceeds being used 

to fund a margin call from Jefferies.

3

 The Debtors only other alleged creditor is The Dugaboy 

Investment Trust (“Dugaboy”). Dugaboy is Mr. Dondero’s family trust of which Mr. Dondero is 

the lifetime beneficiary that previously held a 0.1866% limited partnership interest in HCMLP. 

Dugaboy’s claim against the Debtors arises from a master securities lending agreement pursuant 

to which Dugaboy loaned the Select Fund certain equity securities (the “Loan Share Agreement”), 

which Mr. Dondero caused to be contributed to the Jefferies Account to allow Mr. Dondero to 

meet a then-outstanding margin call in October 2014. 

II. HCMLP’s Bankruptcy; Liquidation of the Jefferies Account

12. On October 16, 2019 (the “HCMLP Petition Date”), HCMLP filed for bankruptcy 

protection in the U.S. Bankruptcy Court for the District of Delaware (the “HCMLP Case”).

4

 At 

the request of HCMLP’s creditors, the HCMLP Case was transferred to the U.S. Bankruptcy Court 

for the Northern District of Texas, Dallas Division (the “Bankruptcy Court”), to be overseen by 

The Honorable Stacey Jernigan, in large part because of her familiarity with Mr. Dondero and 

certain of the entities he then controlled.

5

 

3 In May 2022, the Select Fund paid HCMLP approximately $363,000 on the HCMLP Loan, which represented 

HCMLP’s pro rata share of the Select Fund’s assets after setting an expense reserve of $100,000 and, assuming no 

default interest on the HCMLP Loan, leaving approximately $639,000 in cash at Select Fund. 

4 The HCMLP Case is styled as In re Highland Capital Management, L.P., Case No. 19-34054-sgj11. 

5 Judge Jernigan’s familiarity with Mr. Dondero came from her presiding over In re Acis Capital Management, L.P., 

Case No. 18-30264-sgj-11 (Bankr. N.D. Tex.). Acis Capital Management, L.P., was a former HCMLP subsidiary, 

which was put into an involuntary bankruptcy after Mr. Dondero refused to pay an $8 million arbitration award to a 

former employee and instead chose to strip Acis of assets to make it judgment proof. Acis was marked by extremely 

acrimonious litigation brought by Mr. Dondero against his former employee through a series of controlled proxies. 

See, e.g., In re Acis Cap. Mgmt., L.P., 2019 Bankr. LEXIS 292 (Bankr. N.D. Tex. Jan. 31, 2019); In re Acis Cap. 

Mgmt., L.P., 584 B.R. 115 (Bankr. N.D. Tex. Apr. 13, 2018). 

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13. As of the month end prior to the HCMLP Petition Date, the Select Fund held 

approximately $171 million in long equity positions and $41 million of short equity positions in 

the Jefferies Account; had pledged those securities to secure $119 million in loans from Jefferies; 

and owed $1.1 million on an outstanding margin call in the Jefferies Account. 

14. After HCMLP’s creditors and the U.S. Trustee raised concerns about Mr. 

Dondero’s ability to serve as an estate fiduciary because of his history of self-dealing, creditoravoidance asset transfers, and other breaches of fiduciary duty, HCMLP, its official committee of 

unsecured creditors (the “Committee”), and Mr. Dondero entered into a settlement intended to 

avoid the appointment of a chapter 11 trustee. The settlement was approved by Judge Jernigan on 

January 9, 2020 [HCMLP Case Docket No. 339] (the “January Order”).6 Pursuant to the January

Order: 

• Mr. Dondero was removed from control of HCMLP and an independent board was 

appointed (the “Independent Board”);

7 Mr. Dondero, however, remained an unpaid 

Highland portfolio manager. 

• A “gatekeeper” provision was instituted prohibiting the pursuit or commencement of 

litigation against the Independent Directors without Judge Jernigan’s prior authorization 

and limiting claims to those arising from willful misconduct or gross negligence.8

• A series of operating protocols were enacted which required HCMLP to seek Committee 

approval (and in some instances court approval) prior to entering into nearly any 

transaction, including transactions in the Jefferies Account [HCMLP Case Docket Nos. 

354; 466] (the “Operating Protocols”). 

6 Notwithstanding the January Order, the U.S. Trustee still pressed for the appointment of a chapter 11 trustee. 

[HCMLP Case Docket No. 271].

7 The Independent Board was comprised of retired bankruptcy judge Russell Nelms, John Dubel, and James P. Seery, 

Jr. (the “Independent Directors”). 

8 January Order ¶ 10 (“No entity may commence or pursue a claim or cause of action of any kind against any 

Independent Director . . . relating in any way to the Independent Director’s role as an independent director ... without 

the Court (i) first determining after notice that such claim or cause of action represents a colorable claim of willful 

misconduct or gross negligence against Independent Director ....”). On July 16, 2020, Judge Jernigan approved Mr. 

Seery’s appointment as HCMLP’s chief executive officer and chief restructuring officer [HCMLP Case Docket No. 

854] (the “July Order”). Like the January Order, the July Order prohibited litigation against Mr. Seery without Judge 

Jernigan’s prior authorization and limited claims to those arising from willful misconduct or gross negligence. July 

Order ¶ 5.

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15. During the fourth quarter of 2019 and first quarter of 2020, the Jefferies Account 

was often in margin deficit with the Select Fund (then managed by Mr. Dondero), routinely 

pushing back on requests to meet margin calls. In the first and second quarters of 2020, the margin 

shortfalls became much more acute as the world economy experienced global-pandemic-induced 

economic distress causing the market, including the value of the securities in the Jefferies Account, 

to plummet. The decline in value quickly eroded the equity in the Jefferies Account and caused a 

default allowing Jefferies to seize the Jefferies Account and liquidate essentially all the Select 

Fund’s assets—including any securities allegedly loaned to the Select Fund by Dugaboy—to cover 

the amounts owed to Jefferies.

16. By June 30, 2020, Jefferies had substantially liquidated the Jefferies Account to 

repay Select Fund’s loan, leaving the Jefferies Account with de minimis cash and illiquid 

investments. 

III. Mr. Dondero’s Attempts to “Burn [Highland] Down” and the Gatekeeper

17. In the fall of 2020, with the Committee refusing to capitulate to his demands, Mr. 

Dondero and his controlled entities, like Dugaboy, began interfering with HCMLP’s management, 

threatening HCMLP’s employees, and threatening to “burn [HCMLP] down.”9

 Mr. Dondero’s 

actions led Judge Jernigan to issue a temporary restraining order (the “TRO”) against him,10 which

he promptly violated.

11

9 Confirmation Order (defined below), ¶¶ 74(b); 78.

10 Highland Cap. Mgmt., L.P. v. Dondero, Adv. Pro. No. 20-03190-sgj, Docket No. 10 (Bankr. N.D. Tex. Dec. 10, 

2020). 

11 Mr. Dondero was held in contempt for violating the TRO. Highland Cap. Mgmt., L.P. v. Dondero (In re Highland 

Cap. Mgmt., L.P.), 2021 Bankr. LEXIS 1533 (Bankr. N.D. Tex. Jun. 7, 2021), aff’d 3:21-cv-01590-N, Docket No. 42 

(N.D. Tex. Aug. 17, 2022). 

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18. On February 22, 2021, Judge Jernigan entered the Confirmation Order12 confirming 

HCMLP’s Plan.13 HCMLP’s Plan included a gatekeeper provision (the “Gatekeeper”)14

prohibiting “Enjoined Parties,” like Dugaboy and Mr. Dondero, from bringing claims against 

“Protected Parties,” like HCMLP and its employees and management, unless Judge Jernigan first 

determines the claims to be “colorable.” The Gatekeeper was adopted (i) as a direct result of Mr. 

Dondero’s history of harassing and costly litigation15 and (ii) to prevent harassment of HCMLP’s 

estate and abuse of judicial resources.

16 

19. Judge Jernigan also found, as a matter of fact, that Dugaboy and approximately 40 

other entities were “marching pursuant to the orders of Mr. Dondero”17 and objecting to the Plan, 

not to protect economic interests, but “to be disruptors.”18 

20. In addition to the Gatekeeper and numerous factual findings concerning Mr. 

Dondero’s use of proxies to harass HCMLP, the Plan also included: 

• A discharge of HCMLP under 11 U.S.C. § 1141(d)(1)(A) (Plan, Art. IX.B);

• An injunction prohibiting “Enjoined Parties,” like Dugaboy, from pursuing claims against 

HCMLP or that affect its property, among other enjoined actions (id., Art. IX.F); 

12 “Confirmation Order” refers to the Order (i) Confirming the Fifth Amended Plan of Reorganization of Highland 

Capital Management, L.P. (as Modified) and (ii) Granting Related Relief [HCMLP Case Docket No. 1943].

13 “Plan” refers to the Fifth Amended Plan of Reorganization of Highland Capital Management, L.P. (as Modified)

[HCMLP Case Docket No. 1808].

14 Plan, Art. IX.F. 

15 Confirmation Order, ¶ 77 (“During the last several months, Mr. Dondero and the Dondero Related Entities 

[including Dugaboy] have harassed [HCMLP], which has resulted in further substantial, costly, and time-consuming 

litigation for the Debtor.”). 

16 Id., ¶ 79 (“Approval of the Gatekeeper Provision will prevent baseless litigation designed merely to harass the 

post-confirmation entities charged with monetizing the Debtor’s assets for the benefit of its economic constituents, 

will avoid abuse of the Court system and preempt abuse of judicial time that properly could be used to consider the 

meritorious claims of other litigants.”) (emphasis added).

17 See, e.g., id. ¶ 19

18 See, e.g., id. ¶ 17

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• An exculpation provision limiting claims against Mr. Seery, in his role as an Independent 

Director, to those arising “from willful misconduct, criminal misconduct, or gross 

negligence” (id., Art. IV.D); and

• An administrative bar date (the “Admin Bar Date”) requiring all administrative claims 

against HCMLP to have been filed in the HCMLP Case by September 25, 2021 (id., Art. 

II.A).

HCMLP’s Plan, including the Gatekeeper, became effective on August 11, 2021. [HCMLP Case 

Docket No. 2700]. 

21. The Confirmation Order, including the Gatekeeper, was affirmed in all relevant 

respects by the Fifth Circuit. NexPoint Advisors L.P. v. Highland Cap. Mgmt., L.P. (In re Highland 

Cap. Mgmt., L.P.), 48 F.4th 419, 425–26, 435–39 (5th Cir. 2022). The factual findings in the 

Confirmation Order regarding Mr. Dondero’s direct and indirect harassment of HCMLP were not 

challenged or disturbed on appeal. 

IV. Mr. Dondero’s (and Dugaboy’s) Continued Efforts to Harass HCMLP

22. Notwithstanding the Plan, the Gatekeeper, and two orders holding him in contempt 

of court,19 Mr. Dondero has not been cowed and, with his controlled entities, is currently involved 

in 30 proceedings against or affecting HCMLP—but those proceedings are a fraction of the 

litigation compounded against HCMLP, its estate, and its management by Mr. Dondero. The 

docket in the HCMLP Case contains nearly 3,900 entries; over 15 adversary proceedings have 

been filed by or against Mr. Dondero and his controlled affiliates; and Mr. Dondero and his 

controlled affiliates have filed over 25 appeals from Bankruptcy Court orders. Mr. Dondero’s 

19 Mr. Dondero was held in contempt for violating the TRO (see n.11 supra). Separately, Mr. Dondero, entities he 

controls, and others were subsequently held in contempt for violating the gatekeeper provision in the July Order by 

pursuing claims against Mr. Seery without Judge Jernigan’s authorization. Charitable DAF Fund LP v. Highland 

Cap. Mgmt., LP, 2021 Bankr. LEXIS 2074 (Bankr. N.D. Tex. Aug. 3, 2021), aff’d 2022 U.S. Dist. LEXIS 175778 

(N.D. Tex. Sept. 28, 2022).

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efforts to harass HCMLP also include numerous efforts to litigate matters appropriately in front of 

Judge Jernigan in other courts20 and four motions to recuse Judge Jernigan. 

23. Dugaboy has been an active participant in Mr. Dondero’s harassment. Dugaboy 

joined in each motion to recuse and is currently the protagonist in seven pending actions and 

appeals against HCMLP. 

24. Mr. Dondero’s and Dugaboy’s harassment of HCMLP and its affiliates and 

employees forced HCMLP to file a motion in the U.S. District Court for the Northern District of 

Texas (the “District Court”) seeking an order (a) declaring Mr. Dondero, Dugaboy, and other 

entities controlled by Mr. Dondero “vexatious litigants,” (b) enjoining them from commencing or 

pursuing any claim or cause of action in the District Court or the Bankruptcy Court without written 

permission, and (c) requiring them to file a copy of order finding them vexatious in any pending 

or future litigation or proceeding.21 

25. Of particular relevance here, Mr. Dondero (through proxies, including Dugaboy) 

has twice attempted to pursue claims against HCMLP for its management of the Select Fund during 

the HCMLP Case. 

26. Dugaboy’s Proof of Claim. In April 2020, Dugaboy filed a proof of claim in the 

HCMLP Case (Proof of Claim #131) for $4 million alleging that HCMLP was somehow liable to 

Dugaboy because of the Select Fund’s alleged failure to comply with the Loan Share Agreement. 

After HCMLP incurred the time and cost of objecting to Dugaboy’s claim, Dugaboy withdrew it

20 Charitable DAF Fund, L.P., et al v. Highland Cap. Mgmt., L.P., et al, Case No. 21-cv-0842-B (N.D. Tex. Apr. 12, 

2021); PCMG Trading Partners XXII, L.P. v. Highland Cap. Mgmt., L.P., Case No. 21-cv-01169-N (N.D. Tex. May 

21, 2021); The Dugaboy Inv. Tr. v. Highland Cap. Mgmt., L.P., Case No. 21-cv-01479-S (N.D. Tex. Jun. 23, 2021); 

Charitable DAF Fund, L.P. v. Highland Cap. Mgmt., L.P., Case No. 21-cv-01710-N (N.D. Tex. Jul. 22, 2021). 

21 Highland Capital Management, L.P.’s Motion to Deem the Dondero Entities Vexatious Litigants and for Related 

Relief, Case No. 3:21-cv-00881-X, Docket No. 136 (N.D. Tex. Jul. 14, 2023); Highland Capital Management, L.P.’s 

Memorandum of Law in Support of Its Motion to Deem the Dondero Entities Vexatious Litigants and for Related 

Relief, Case No. 3:21-cv-00881-X, Docket No. 137 (N.D. Tex. Jul. 14, 2023).

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with prejudice. In withdrawing its claim, Dugaboy conceded that HCMLP’s Plan “vests exclusive 

jurisdiction of the claim of Dugaboy against [Select Fund] in [Judge Jernigan’s] Court.” HCMLP 

Case Docket No. 2933 ¶ 5. 

27. PCMG Complaint. In May 2021, PCMG—another entity controlled by Mr. 

Dondero (see n.2 supra)—sued HCMLP in the District Court for breach of fiduciary duty because 

of HCMLP’s alleged mismanagement of the Select Fund.22 PCMG never served HCMLP with its 

complaint but instead obtained an ex parte stay.23 HCMLP subsequently moved for 

reconsideration of the stay order,

24 and the District Court lifted the stay and referred the complaint 

to Judge Jernigan as a matter related to the HCMLP Case.

25 HCMLP subsequently moved to 

dismiss the complaint for failure to comply with the Admin Bar Date.26 After forcing HCMLP to 

incur substantial costs, PCMG consented to the dismissal of its complaint with prejudice. 

28. After Mr. Dondero’s efforts to sue HCMLP over the Select Fund failed, Dugaboy

filed suit against the Debtors in the U.S. District Court for the Southern District of New York (the 

“New York Action”).27 The New York Action is the sole reason the Debtors filed these cases. To 

avoid the costs of these cases, HCMLP offered to waive the balance of the HCMLP Loan and 

allow Dugaboy to take all remaining cash and investments at Select Fund in complete settlement 

of all parties’ claims. To date, Dugaboy has not responded to that offer. 

22 PCMG Trading Partners XXII, L.P. v. Highland Cap. Mgmt., L.P., Case No. 21-cv-01169-N, Docket No. 1 (N.D. 

Tex. May 21, 2021).

23 Id., Docket No. 6. 

24 Id., Docket No. 8. 

25 Id., Docket No. 19.

26 PCMG Trading Partners XXIII, L.P. v. Highland Cap. Mgmt., L.P. (In re Highland Cap. Mgmt., L.P.), Adv. Proc. 

No. 22-03062-sgj, Docket No. 20 (Bankr. N.D. Tex. Jun. 16, 2022).

27 The Dugaboy Inv. Tr. v. Highland Select Equity Master Fund, L.P., et al, Case No. 23-cv-01636 (S.D.N.Y. Feb. 27, 

2023).

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V. Dugaboy’s Objection to Re-Assignment

29. Not surprisingly, Dugaboy has objected to re-assignment of these cases to Judge 

Jernigan [Docket No. 20] and, in doing so, ignores the reality of the HCMLP Case. Any 

investigation into these cases will involve conduct that occurred during, and as part of, the HCMLP 

Case and, among other things, will require analysis and application of the Gatekeeper, the January 

and July Orders, the Admin Bar Date, and HCMLP’s Plan’s discharge and exculpation provisions. 

Dugaboy cannot alter these indisputable realities nor preclude Judge Jernigan’s necessary 

involvement in the management of these cases by alleging “bias.” 

30. But, importantly, Dugaboy’s allegations of bias are unfounded. Judge Jernigan has 

ruled—many times—against Dugaboy and Mr. Dondero and made detailed factual findings about 

Mr. Dondero and his controlled affiliates. The driver of those rulings, however, was Mr. 

Dondero’s conduct, not Judge Jernigan’s “bias.” Nearly every one of Judge Jernigan’s rulings has 

been affirmed on appeal by the District Court and then by the Fifth Circuit. None of Judge 

Jernigan’s factual findings have been overturned, notwithstanding Mr. Dondero’s efforts. Mr. 

Dondero obviously dislikes Judge Jernigan’s decisions, but they are not evidence of Judge 

Jernigan’s bias; they are evidence of Mr. Dondero’s vexatiousness. 

31. Judge Jernigan made this clear in her two detailed rulings denying Mr. Dondero’s 

many motions to recuse her. In re Highland Cap. Mgmt., L.P., Case No. 19-30454-sgj11, Docket 

No. 2803 (Bankr. N.D. Tex. Mar. 22, 2021); In re Highland Cap. Mgmt., L.P., 2023 Bankr. LEXIS 

579 (Bankr. N.D. Tex. Mar. 5, 2023). Indeed, Judge Jernigan specifically addressed the meritless 

allegations raised by Dugaboy in its objection to re-assignment including its ludicrous allegations 

concerning Judge Jernigan’s fictional novels. Highland, 2023 Bankr. LEXIS 579 at *50-52 (“The 

Presiding Judge’s novels—again entirely fiction—are not about Mr. Dondero or the hedge fund

industry in general ... there are no characters or entities in her books that have been inspired by or 

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modeled after [Mr. Dondero and his controlled affiliate]”). Judge Jernigan also noted that Mr. 

Dondero’s motion to recuse “[r]egrettably ... containsseveral misstatements or partial descriptions

of events ... in several places that create misimpressions” and specifically addressed “[s]ome of 

the more problematic examples” of Mr. Dondero’s mistruths.28 Mr. Dondero (and Dugaboy) 

moved to appeal Judge Jernigan’s rulings on their recusal motions. The District Court denied both 

leave to file an interlocutory appeal and the request for a writ of mandamus.29

32. Yet, despite these detailed findings, Dugaboy now seeks to have this Court 

determine Judge Jernigan is too biased to hear the Debtors’ cases. That is improper. Mr. 

Dondero’s desire for any judge but Judge Jernigan—notwithstanding her familiarity with, and all

but certain involvement in, these cases—is its own brand of forum shopping and should not be 

countenanced. 

33. Dugaboy is also wrong on the law. Judges “have the inherent power to transfer 

cases from one to another for the expeditious administration of justice.” U.S. v. Stones, 411 F.3d 

597, 598-99 (5th Cir. 1969); see also Cook v. City of Dallas, 683 F. App’x. 315, 322-23 (5th Cir. 

2017). As evidenced by the Debtors’ bankruptcy cases, Mr. Dondero’s litigation crusade against

HCMLP has metastasized to HCMLP’s subsidiaries—subsidiaries that have no personnel of their 

own and therefore act only through HCMLP and its employees. Accordingly, it is highly likely 

that the Debtors’ bankruptcy cases will affect the HCMLP Case and, wastefully and regrettably, 

spawn additional lawsuits against HCMLP and its employees, thus triggering the Gatekeeper. 

Judge Jernigan will be intimately involved in the Debtors’ cases regardless of whether they are reassigned to her. Re-assigning the Debtors’ cases will therefore substantially aid judicial economy. 

28 Id. at *27-50.

29 Dondero v. Jernigan (In re Highland Cap. Mgmt., L.P.), 2022 U.S. Dist. LEXIS 23454 (N.D. Tex. Feb. 9, 2022); 

Civ. Action No. 3:21-cv-0879-K, Docket Nos. 41, 42.

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CONCLUSION

34. For the foregoing reasons, HCMLP respectfully requests that this Court grant (i) 

the Motion in its entirety and (ii) such other relief as this Court deems just and proper.

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DOCS_NY:47984.1 36027/003

Dated: July 14, 2023

PACHULSKI STANG ZIEHL & JONES LLP

Jeffrey N. Pomerantz (pro hac vice pending) 

John A. Morris (pro hac vice pending) 

Gregory V. Demo (pro hac vice pending) 

Hayley R. Winograd (pro hac vice pending) 

10100 Santa Monica Boulevard, 13th Floor 

Los Angeles, CA 90067 

Tel: (310) 277-6910 

Fax: (310) 201-0760 

Email: jpomerantz@pszjlaw.com 

 jmorris@pszjlaw.com

 gdemo@pszjlaw.com 

 hwinograd@pszjlaw.com 

-andHAYWARD PLLC

/s/ Zachery Z. Annable 

Melissa S. Hayward

Texas Bar No. 24044908 

MHayward@HaywardFirm.com

Zachery Z. Annable

Texas Bar No. 24053075 

ZAnnable@HaywardFirm.com 

10501 N. Central Expy, Ste. 106 

Dallas, Texas 75231 

Tel: (972) 755-7100 

Fax: (972) 755-7110 

Counsel for Highland Capital Management, L.P., 

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