US - Jeffrey Gundlach has filed a counter suit against former employer TCW claiming the firm owes him and his team up to US$1.25bn as part of an agreement that guaranteed them a percentage of management fees.
Gundalch allleged TCW "hatched a scheme" to deprive Gundlach and his team members from their share of the fees.
The complaint says: "TCW agreed with Gundlach to share with him and his team a predetermined percentage of the management fees and performance fees generated on the TCW funds his group managed. As time went on, these funds performed so well that the anticipated future fees that would be owed under this agreement became enormous, reaching at least $600m and easily approaching $1.25bn and beyond."
In December, TCW announced that it had sacked Gundlach from his chief investment officer post and bought bond shop Metropolitan West Asset Management. Met West CIO Tad Rivelle replaced Gundlach. (Global Pensions; December 7, 2009)
Gundlach had managed about two-third's of the firm's $108bn in assets. Within days of his termination, he set up DoubleLine Capital and has since lured 40 former TCW portfolio managers.
In his suit, Gundlach said TCW has been crippled by the exodus, losing $6bn from a mutual fund run by Gundlach and Philip Barach, now DoubleLine president, and the winding down of a $2bn public private investment partnership fund run for the US Treasury. (Global Pensions; January 6, 2010)
In January, TCW sued Gundalch and his partners for allegedly stealing proprietary investing information to set up their own firm. TCW also claimed it had found drug and pornographic paraphernalia in Gundlach's office after he was terminated. (Global Pensions; January 8, 2010)
In his answer-suit, Gundlach said he never stole proprietary information.
It said: "TCW knows perfectly well that this is not true. As TCW was well aware when it filed this lawsuit, DoubleLine has adopted significant remediation measures designed to avoid DoubleLine's use of any proprietary or confidential information that might have been in the custody of former TCW employees and to return any such materials to TCW."
Officials at TCW did not return calls for comment.
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