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Money Management

TCW terminating distressed debt fund formerly managed by woman suing for sexual harassment

TCW Group is winding down a distressed debt fund that had been run by Sara Tirschwell, a former manager of TCW's distressed strategy group and portfolio manager of the TCW Distressed Fund who is suing the money manager for sexual harassment, said Doug Morris, TCW spokesman, in an email.

On March 8, TCW sent a letter to the fund's investors informing them that the fund would be closing effective March 31. TCW expects to distribute approximately 80% of the fund's net asset value to investors shortly after March 31, the letter states.

An earlier TCW letter dated Dec. 20 informed investors of Ms. Tirschwell's Dec. 14 departure from TCW, which triggered a key-person event that gave investors the right to request a redemption within 30 days of the letter. In the earlier letter, TCW indicated that the firm intended to continue managing the fund.

"The firm remains committed to sponsoring and managing the distressed strategy and to the continued growth of the fund," the December letter states.

Ms. Tirschwell sued TCW in January, alleging the firm fired her a month earlier after she had lodged a sexual harassment complaint with TCW against her direct supervisor, Jess Ravich, group managing director and head of alternative products. In February, TCW answered the complaint, alleging that Ms. Tirschwell was fired for cause because she had not raised a minimum of $100 million in capital for the distressed debt fund as TCW said was required by firm's agreement with her.

In the March letter, TCW states that there will be no further redemptions by investors, including redemptions requested in connection with the key-person event. However, the fund will not charge carried interest. TCW will reimburse investors for all non-transaction fund expenses except for management fees paid, and will bear any future non-transaction-related fund expenses through the fund's ultimate termination.

Mr. Morris declined to provide further comment and declined to provide the size of the fund.