HCD Highland Distressed Opportunities, Inc.

Highland Capital Management, L.P. (�Highland�) announced changes, effective January 1, 2009, to the portfolio management teams of Highland Credit Strategies Fund (NYSE: HCF) and Highland Distressed Opportunities, Inc. (NYSE: HCD). Highland Credit Strategies Fund will be managed by Brad Borud and Brad Means. Mr. Borud is currently a member of the portfolio management team for Highland Credit Strategies Fund. Mr. Means is a Senior Portfolio Manager at Highland. Highland Distressed Opportunities, Inc. will be managed by Brad Borud and Greg Stuecheli. Messrs. Borud and Stuecheli are currently members of the portfolio management team for Highland Distressed Opportunities, Inc. Detailed biographical information of each of the portfolio managers is provided below: Brad Borud. Mr. Borud is a Partner, Senior Trader and Chief Investment Officer�Retail Products at Highland. Prior to his current duties, Mr. Borud served as a Senior Trader and Co-Director of Portfolio Management for Highland from 2003 to 2008, as a Portfolio Manager and Team Leader from 2001 to 2003, as a Portfolio Manager from 1998 to 2001, and as a Portfolio Analyst from 1996 to 1998. As a Portfolio Manager, Mr. Borud covered a wide range of industries, including wireline telecommunications, wireless telecommunications, telecommunication equipment manufacturers, multi-channel video and media. Prior to joining Highland in November 1996, Mr. Borud worked as a Global Finance Analyst in the Corporate Finance Group at NationsBank from 1995 to 1996 where he was involved in the originating, structuring, modeling and credit analysis of leveraged transactions for large corporate accounts in the Southwest region of the United States. In 1994, Mr. Borud served at Conseco Capital Management as an Analyst Intern in the Fixed Income Research Department, following the transportation and energy sectors. Mr. Borud has a BS in Business Finance from Indiana University. Brad Means. Mr. Means is a Partner and Senior Portfolio Manager at Highland. Prior to joining Highland in May 2004, Mr. Means was a Managing Director in FTI Consulting�s Corporate Finance group where he worked on corporate turnaround, restructuring and bankruptcy advisory engagements. From 1998 to 2001, he was a Director in PricewaterhouseCoopers LLP�s Chairman�s Office and focused on enterprise strategy, venture capital, business development and divestiture initiatives. Prior to his role in the Chairman�s Office, Mr. Means worked in the Strategic Change Consulting and the Assurance & Business Advisory groups of Price Waterhouse serving clients across a broad range of industries including Automotive, Energy, Financials and Industrials. He holds an MBA from the Stanford Graduate School of Business and a BSBA in Finance and Accounting from Creighton University. He has earned the right to use the Chartered Financial Analyst designation. Greg Stuecheli. Mr. Stuecheli is a Partner and Senior Portfolio Manager at Highland. Prior to his current duties, Mr. Stuecheli was a Portfolio Manager for Highland covering distressed and special situation credit and equity investments. Prior to joining Highland in June 2002, Mr. Stuecheli served as an analyst for Gryphon Management Partners, LP from 2000 to 2002, where his primary responsibilities included researching long and short investment ideas. In 1999, Mr. Stuecheli was a Summer Associate at Hicks, Muse, Tate & Furst, and from 1995 to 1998, Mr. Stuecheli worked as a chemical engineer at Jacobs Engineering Group and Cytec Industries. Mr. Stuecheli received an MBA from Southern Methodist University and a BS in Chemical Engineering from Rensselaer Polytechnic Institute. He has earned the right to use the Chartered Financial Analyst designation. About Highland Credit Strategies Fund Highland Credit Strategies Fund (�HCF�) is a non-diversified, closed-end management investment company. HCF�s investment objectives are to provide both current income and capital appreciation. HCF invests primarily in secured and unsecured floating and fixed rate loans, bonds and other debt obligations, debt obligations of stressed, distressed and bankrupt issuers, Highland has served as HCF�s adviser since its inception in 2006. HCF�s shares are listed on the NYSE under the symbol �HCF�. An investment in HCF is not appropriate for all investors. No assurance can be given that HCF will achieve its investment objectives. About Highland Distressed Opportunities, Inc. Highland Distressed Opportunities, Inc. (�HCD�) is a recently-organized, non-diversified closed-end company that has elected to be treated as a business development company under the Investment Company Act of 1940. HCD�s investment objective is total return generated by both capital appreciation and current income. HCD seeks to primarily invest in financially-troubled or distressed companies that are either middle-market companies or unlisted companies by investing in senior secured debt, mezzanine debt and unsecured debt, each of which may include an equity component, and in equity investments. Generally, distressed companies are those that (i) are facing financial or other difficulties and (ii) are or have been operating under the provisions of the U.S. Bankruptcy Code or other similar laws or, in the near future, may become subject to such provisions or otherwise be involved in a restructuring of their capital structure. An investment in HCD is not appropriate for all investors. No assurance can be given that HCD will achieve its investment objectives. General Information Shares of closed-end investment companies and business development companies frequently trade at a discount to net asset value. The price of shares of HCF (the �Fund�) and HCD (the �Company�) is determined by a number of factors, several of which are beyond the control of Highland, the Fund and the Company. Therefore, Highland, the Fund and the Company cannot predict whether their shares will trade at, below or above their respective net asset values. Past performance does not guarantee future results. Forward Looking Statements This press release may contain forward-looking statements. These forward-looking statements are subject to various risks and uncertainties, which could cause actual results and conditions to differ materially from those projected, including the uncertainties associated with the timing of transaction closings, changes in interest rates, availability of transactions, the future operating results of portfolio companies, changes in regional, national, or international economic conditions and their impact on the industries in which the Fund and the Company invest, or changes in the conditions of the industries in which the Fund and the Company invest, and other factors enumerated in their filings with the Securities and Exchange Commission (�SEC�). Highland may use words such as �anticipates,� �believes,� �expects,� �intends,� �will,� �should,� �may� and similar expressions to identify forward-looking statements. Undue reliance should not be placed on such forward-looking statements as such statements speak only as of the date on which they are made. Highland does not undertake to update its forward-looking statements unless required by law. Persons considering an investment in the Fund or the Company should consider the investment objective, risks, and charges and expenses of the particular Fund or Company carefully before investing. Such information and other information about the Fund and the Company is available in the Fund�s financial reports, the Company�s annual report on Form 10-K, quarterly reports on Form 10-Q and the Company�s current reports on Form 8-K. Such materials are filed with the SEC and copies are available on the SEC�s website, www.sec.gov. Prospective investors should read such materials carefully before investing. About Highland Capital Management, L.P. Highland Capital Management, L.P., the investment adviser to each of Highland Credit Strategies Fund and Highland Distressed Opportunities, Inc., is a leading alternative investment management firm specializing in credit and structured products. Headquartered in Dallas, Texas, Highland manages assets on behalf of investors around the world with offices in New York, Singapore, and London.