Bill Gross sues Pimco for $200 million over forced ouster

Thu Oct 8, 2015 4:46pm EDT
 
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By Jennifer Ablan and Jonathan Stempel

NEW YORK (Reuters) - Billionaire bond investor Bill Gross sued his former employer Pacific Investment Management Co and its parent Allianz SE (ALVG.DE: Quote) for $200 million, saying a greedy "cabal" of executives drove him out of the bond fund giant he helped found because they wanted his huge bonus for themselves.

The lawsuit ratchets up the vitriol between Gross, 71, who now works at Janus Capital Group Inc (JNS.N: Quote), and Pimco, which he built over four decades into a $2 trillion bond fund company. His ouster was announced on Sept. 26, 2014.

In plotting to get rid of him, Pimco managing directors were "driven by a lust for power, greed, and a desire to improve their own financial position and reputation," Gross said in a complaint filed on Thursday in the California Superior Court in Orange County.

Gross had been "on track" to receive a bonus topping $250 million in 2014, with most paid late in the year, according to the complaint. He accused Pimco of constructive termination, breach of contract, and bad faith.

"This lawsuit has no merit and our legal team will be responding in court in due course," Pimco spokesman Michael Reid said. Allianz also said the lawsuit has no merit.

A Janus spokeswoman called the lawsuit "a personal matter related to Bill."

Gross, through a spokesman, declined to comment. His lead lawyer Patricia Glaser said in a statement any recoveries will go to charity, including the Pimco Foundation.

"I was saddened to hear Bill felt it necessary to revisit this already well-aired dirty laundry," said John Brynjolfsson, a former Pimco managing director and colleague of Gross. "I suspect all his confidants told him to move on."   Continued...

 
Bill Gross adjusts his sunglasses as he arrives to speak at the Morningstar Investment Conference in Chicago, Illinois, June 19, 2014.  REUTERS/Jim Young