Highland Capital secures court approval of settlement with UBS

By Sarah Lizee

Olympia, Wash., May 28 – Highland Capital Management, LP obtained court approval of a settlement with UBS Securities LLC and UBS AG London Branch to resolve over $1 billion in claims that UBS has filed against Highland, according to an order filed Thursday with the U.S. Bankruptcy Court for the Northern District of Texas.

The settlement also resolves UBS’ claims against certain related parties that have been pending for more than a decade in the Supreme Court of the State of New York.

The UBS claims arise from a judgment entered by the state court against Highland CDO Opportunity Master Fund, LP and Highland Special Opportunities Holding Co. and related claims against the debtor and other funds managed by the debtor.

The settlement provides for the allowance of the UBS claim as a single general unsecured claim in the amount of $65 million against the debtor and a single subordinated unsecured claim in the amount of $60 million against the debtor.

The settlement also provides for a payment of $18.5 million to UBS by Highland Multi Strategy Credit Fund, LP, a non-debtor fund managed by the debtor that is a co-defendant in the state court litigation.

In exchange for the allowance of the UBS claim and the payment by Highland Multi Strategy, UBS will, among other things, release claims against the debtor, Highland Multi Strategy and the debtor’s general partner, Strand Advisors, Inc., also named as a defendant in the state court litigation.

“The settlement agreement ends the debtor’s decade-long dispute with UBS, and avoids the expense, delay, and uncertainty of further litigation on the UBS claim,” Highland said in its motion.

HCMLP is a Securities and Exchange Commission-registered investment adviser on Dallas-based Highland Capital Management’s global alternative investment platform. The company filed bankruptcy on Oct. 16, 2019 in the U.S. Bankruptcy Court for the District of Delaware. The case was later transferred to the Texas court under Chapter 11 case number 19-34054.

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