Hi Epic!
Wow! I am SO SORRY that you've received so many hostile replies. Hmm. I've never encountered such adversarial advice on a message board before. You don't deserve this and, certainly, in seeking help, one should never be subjected to such biased and uninformed opinions.
I'm not a lawyer, (although I've worked as a legal assistant for a divorce attorney), however, I feel that I can give you some sound advice.
For one, from what you've said, you have legal guardianship of your step-daughter. Exactly what legal leverage have you obtained regarding her upbringing? What legal protection do you have as her guardian? It seems to me that you should have some legal say with regard to her welfare since you have raised her since infancy with her mother.
Also, it appears that this 'bio dad' has made no formal attempt whatsoever to be a part of his daughter's life. And, IMO, if he's trying to get child support reduced (even though he hasn't paid any), it seems that only NOW is he making an attempt to see his daughter for the simple fact that requesting a reduction would make him look even WORSE if he doesn't start demanding some sort of visitation. IOW, methinks he's trying to USE ~your~ daughter as a tool to LOWER child support. What I'm thinking is that, if he tries to walk into court for a reduction but has NEVER seen or WANTED to see his/your daughter, the judge would laugh him out of the courtroom.
He's acting as his own attorney? Pfffffft. This will work out in your favor! But what I really think he's going after is this: I think that he's looking to SURRENDER his paternal rights to his(your) daughter for a PRICE. That's right. He's going to try to NEGOTIATE with you and your wife. He'll probably ask that you waive ALL child support he owes and in exchange he'll withdraw all legal rights as her father which will allow YOU to adopt her.
Doesn't that make more sense?
Clearly this creep doesn't give a hill of beans about 'his' daughter. But he knows that YOU do. So, he's looking for something to gain here. And if this ISN'T something he's going after? It might be worth it for you to offer it up to him. But remember to negotiate wisely. Offer him, say, HALF of the the child support off his tab in exchange for him signing off as daddy. He'll counter with requesting most or all of the arrears being wiped clean. And, from there, you can agree and get that sorry jerk out of your lives once and for all.
As for your daughter, I don't see anything wrong with you and your wife not telling her about him. IMO, he isn't someone she should have in her life. Certainly not now, and possibly not ever. She can be informed of his existence but I think it's best to let her decide her relationship with him when she's older. I sincerely don't think she'll be hurt by any of this.
The one who's loved her, who's cared for her, and who's loved/cherished her mother is, IMO, her 'real' father. Sperm donors, (especially those who fly under the radar for nearly a decade), have willingly forfeited their emotional rights to their progeny and, therefore, IMO, should be allowed only limited rights under the circumstances.
Definitely check with the court to see if he has, in fact, filed anything. This guy's just out looking for money.
Hang tough and take care! Best of luck to you!
Cynthia