Billionaire investor Bill Gross has filed a civil lawsuit against the company he co-founded, Pacific Investment Management Co. (“Pimco”), over his 2014 ouster, which he claims was improper.
Gross, known as the Bond King for his amazing investment returns, filed the lawsuit in California state court on Thursday morning and is seeking over $200 million in damages.
The lawsuit also names Pimco’s parent Allianz SE as a defendant. His complaint describes, for the first time, Gross’ version of the power struggle that led to his being pushed out of the company.
In the suit, Gross alleges that his former colleagues pushed him out of the investment juggernaut that he helped build so that they could stake a bigger claim on the annual bonus pool.
The complaint states that, “Driven by a lust for power, greed, and a desire to improve their own financial position and reputation at the expense of investors and decency, a cabal of Pimco managing directors plotted to drive founder Bill Gross out of Pimco in order to take, without compensation, Gross’s percentage ownership in the profitability of Pimco.” The complaint also claims that Pimco executives’ “improper, dishonest, and unethical behavior must now be exposed.”
According to the filing, Gross claims that the California-based firm owes him at least “hundreds of millions” of dollars for his wrongful termination, breach of written contract, and breach of the covenants of good faith and fair dealing.
Gross was expecting a bonus of about $250 million for fiscal year 2014, most of which was due in the second half of the year, according to the lawsuit. Because he left the firm days before the end of the third quarter, Pimco refused to pay him a proportionate amount.
Patricia Glaser, Gross’s lead attorney, told reporters that Gross, who is reportedly worth $2 billion, would not keep any money he recovered and that all proceeds from the lawsuit would go to charity, including the Pimco Foundation.
Pimco responded to the allegations by stating that, “This lawsuit has no merit and our legal team will be responding in court in due course. Our focus remains on our clients and their investment portfolios.”
Gross essentially claims that he was trying to do what was right for the company’s investors and that other executives were trying to bilk its customers and pad their wallets instead.
The lawsuit will be closely watched by the business and finance community.
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