Highland’s Dondero to Step Down from Bankrupt Unit Under Deal

James Dondero would relinquish decision-making power over Highland Capital Management LP -- a bankrupt unit of the investment firm he co-founded in 1993 -- under the terms of a deal with creditors in the case, court papers show.

• Lawyers for Highland are asking a federal judge to sign off on the deal, which would settle months of litigation between creditors and Highland over governance of the unit
• The deal would see independent directors appointed to the board of the entity that controls the Highland unit, while Dondero would resign as an employee of the bankrupt segment, court papers show
• A ...