The TCW v. Gundlach Trial Begins
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Tuesday, July 26, 2011

The TCW v. Gundlach Trial Begins

The TCW and Jeff Gundlach trial is underway. Jury selection in the lawsuit and cross-claim was scheduled to begin at 10am yesterday in the Superior Court of California in downtown Los Angeles. And more details about the dispute continue to come out.

To read the rest of the story of the fight between Gundlach and TCW, click here.

TCW accused Gundlach and his colleagues of swiping trade secrets (including client and investment data) before launching their own new firm, DoubleLine Capital, in December 2009, while Gundlach claimed that TCW fired him to avoid paying his team up to $1.25 billion in fees.

So what's new in the case as the trial begins? CNBC's Jane Wells reports that, according to Susan Estrich (outside counsel for TCW), TCW may bring a "very relevant" sexual relationship between Gundlach and a co-defendant, despite the judge already tossing TCW's claims about marijuana, pornography, sex toys and more allegedly found in Gundlach's office. CNBC estimates that the trial will last four to six weeks.

And in Fortune's "Term Sheet" blog, Katie Benner reports that TCW is fighting to keep a specific deposition, of TCW corporate strategy chief Michael Conn, out of the trial, as well as notes Conn took during a meeting. According to Fortune, Conn's notes suggest that in August TCW executives discussed firing Gundlach, before (not after) they claimed to have learned he was planning to start his own firm.

"We have argued, and continue to believe, that the notes in question were protected by attorney client privilege," Estrich told Fortune, as TCW says TCW general counsel Michael Cahill attend the meeting in question by phone.

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