Jeffrey Gundlach today filed suit against TCW seeking $1.25 billion, claiming his former employer “hatched a scheme” to deprive him and his associates of lucrative compensation packages.
The suit, filed in the California Superior Court in Los Angeles, alleges that fixed-income funds and strategies managed by Mr. Gundlach and his group performed so well that fees owed to him and his associates “became enormous, reaching at least $600 million and easily approaching $1.25 billion and beyond.”
The lawsuit is a response to a suit TCW filed on Jan. 7 against Mr. Gundlach, its former chief investment officer, accusing him of stealing TCW property, fraud and breach of fiduciary duty. TCW on Dec. 4 terminated Mr. Gundlach, who quickly started his own money management firm, DoubleLine Capital, hiring in the process more than 40 of his TCW colleagues.
In a statement accompanying the lawsuit, Mr. Gundlach said he was disappointed by TCW's “transparent attempt” to slow his new company's momentum.
“I believe the facts stack up overwhelmingly on our side,” he said in the statement. “I would be delighted to see this case go to trial tomorrow, if that were feasible.”
In his countersuit, Mr. Gundlach, denied stealing TCW property, asserting that DoubleLine has hired a third-party computer expert to search computers and remediate any TCW information that might have been in the possession of any of the former TCW employees now working for him at the new firm.
TCW spokeswoman Erin Freeman said Mr. Gundlach's claims are false.
"Mr. Gundlach’s spin regarding the reasons for his termination are completely erroneous,” said Ms. Freeman in an e-mail response. "As is well documented, this comes from an individual who earned $40 million last year and $135 million over the past five years.”
She said that Mr. Gundlach's counterclaims will be addressed in court and that the company has “no intention of deflecting attention away from the serious misconduct and breach of fiduciary duties of which he and his co-defendants are accused.”