(Source: Business Wire)
Highland Distressed Opportunities, Inc. (the "Company") (NYSE: HCD) today announced that its Board of Directors has declared two pro rata dividend distributions on its common stock, which will be comprised of all of the Company's remaining (i.e. not previously distributed) net investment income (if any), net short-term capital gain (if any), and net long term capital gain (if any) for (i) the short taxable year of the Company beginning on January 1, 2009 and ending at the effective date of the Merger (as defined below), and (ii) the taxable year of the Company ended December 31, 2008. Each pro rata distribution will be paid to the Company's stockholders of record at the close of business on the day immediately prior to the effective date of the Merger. The "Merger" is the merger of the Company with and into HCF Acquisition LLC, a wholly owned subsidiary of Highland Credit Strategies Fund as part of the reorganization of the Company into Highland Credit Strategies Fund.
Stockholders who sell their shares of the Company on the effective date of the Merger will not receive the distributions because the shares will trade with a due bill. The pro rata distributions are expected to be paid on a date ten (10) days following the effective date of the Merger. The closing of the Merger is currently expected to occur after the close of business on June 12, 2009. The closing of the Merger is subject to a number of closing conditions, and there can be no assurances the Merger will be consummated, or consummated on the date expected.
This press release is not for tax reporting purposes but is being provided to announce the declaration of a distributions that have been declared by the Board of Directors. In early 2010, after definitive information is available, the Company will send stockholders a Form 1099-DIV specifying how the distributions paid by the Company during the calendar year should be characterized for purposes of reporting the distributions on a stockholder's tax return (e.g., ordinary income, short-term capital gain, long-term capital gain or return of capital).
There is no limit on the amount of the Company's portfolio that can be invested in distressed or bankrupt issuers. Such investments generally trade significantly below par and are considered speculative. The repayment of defaulted obligations is subject to significant uncertainties. Defaulted obligations might be repaid, if at all, only after lengthy workout or bankruptcy proceedings, during which the issuer might not make any interest or other payments.
