MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
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Friday, July 29, 2011 TCW Says Gundlach Stole Its 'Recipe for Kentucky Fried Chicken' More than 19 months after TCW [see profile] fired star fixed-income PM Jeff Gundlach, the Los Angeles-based mutual fund firm and its former chief investment officer have started trading barbs in front of a jury. Yesterday attorneys for the two sides presented their opening arguments in a Los Angeles court room [see transcript]. To read the rest of the story of the fight between Gundlach and TCW, click here. Bloomberg, the Los Angeles Times, Pensions & Investments and Reuters all covered the opening arguments. According to the Times, yesterday in court Gundlach sat right behind TCW CEO Marc Stern. Gundlach started a new fund firm, DoubleLine [see profile], just ten days after TCW fired him in December 2009 and bought MetWest to replace him, and a number of ex-TCW employees joined Gundlach at the new firm. TCW sued Gundlach in January 2010 for allegedly swiping trade secrets (and they tossed in claims about drugs, pornography and sex toys allegedly found in Gundlach's desk), and Gundlach counter-sued (i.e. filed a cross-claim) accusing TCW of firing him to avoid paying him and his team up to $1.25 billion in fees. Now the two sides are duking it out in front of a jury, with TCW asking for $375 million in damages and Gundlach asking for about $500 million. (And the judge tossed the sex and drug claims from court before the jury trial began.) Yesterday John Quinn, representing TCW, reiterated the fund firm's claim that Gundlach and his DoubleLine team "secretly plotted to leave en masse" by stealing the equivalent of "the recipe for Kentucky Fried Chicken." Quinn even called a DoubleLine employee, Rachel Cody, to support a TCW claim that Gundlach negotiated about possibly jumping to another fixed income giant, Legg Mason's Western Asset Management Company. "This was an inside job … He was threatening to take his marbles and leave," Quinn reportedly said. "Even though he [Gundlach] was so highly paid, you are going to hear he was bitter, he was unhappy, he wanted more power, he wanted more money. He wanted to be CEO." DoubleLine attorney Brad Brian, on the other hand, stuck with Gundlach's claims that TCW dumped him to avoid paying fees that had climbed "through the roof." "They knew they were going to owe him a lot of money," Brian reportedly said, adding that Gundlach and his team only started preparing to create DoubleLine once he knew TCW wanted to oust him. "He wanted to be ready in case he was fired." Societe Generale-backed TCW manages about $120 billion, while DoubleLine works with $13 billion. Printed from: MFWire.com/story.asp?s=37444 Copyright 2011, InvestmentWires, Inc. All Rights Reserved |