Hedge fund manager James Dondero is currently fighting legal battles on two fronts: one is versus an ex-portfolio manager who say he was fired for raising questions about Dondero’s alleged plan to “use money due to outside investors…to buy a South American company that he intended to convert into a condom manufacturer” and also about Dondero’s use, allegedly, of the term “jackasses” to describe said investors. The other is versus a bunch of investors themselves, who, in addition to claiming Dondero owes them money, say he enjoys referring to them as "idiots."

Highland’s founders James Dondero and Mark Okada have fought an unusual number of legal battles since the crisis. But the two new lawsuits mark the first time organized committees representing all investors in the liquidating hedge funds have sued the firm; one of the committees recently scored a victory in its case. The lawsuits claim Highland, which manages about $17 billion, enriched itself by secretly taking a roughly $30 million fee out of one fund, called Crusader, and inappropriately selling assets from a second, called Credit Strategies...One of the largest investments left in the fund in 2011 was a 19% private-equity stake in Cornerstone Healthcare Group, an acute-health-care company majority owned by Highland and its other hedge funds. The shares became a flashpoint in 2012 after Highland proposed selling the stake to Cornerstone for less than what investors considered fair value. Investors led by the Colburn Foundation, a Los Angeles-based classical-music charity, and investment adviser Concord Management refused and tempers flared. Mr. Dondero called the investors “idiots,” and “disrespectful,” for questioning the proposed share sale, according to emails disclosed in court documents. He also pushed the investors to start paying Highland a $250,000 monthly management fee for liquidating the defunct fund because of the “significant monthly legal expenses” involved, according to the emails.

Terms Dondero will surely be accused of using about his investors in any potential future lawsuits? Smart money's gotta go with:

• Bozos
• Clowns
• Morons
• Sh*ts-for-brains
• Mouth-breathers

Highland Capital Investors Allege Wrongdoing in Long-Closed Hedge Funds [WSJ]