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March 27, 2017 at 09:08 AM
After a very public dispute, Bill Gross and the fund firm he co-founded in Southern California, Pacific Investment Management Co., said Monday that they have reached an “amicable settlement” of a breach of contract lawsuit for $81 million. The fixed income portfolio manager filed the suit in 2015, about a year after he was fired.
Gross, who now runs the Janus Global Unconstrained Bond Fund, plans to donate the settlement and $19 million in additional funds to his family foundation, according to a Bloomberg report.
He had originally sought $200 million in damages in the lawsuit, which was set to go to trial in September.
“Pimco has always been family to me, and, like any family, sometimes there are disagreements,” the 72-year-old portfolio manager said in statement. “I’m glad that we have had the opportunity to work through those, and see the Pimco founders receiving the recognition they deserve.”
As part of the settlement, Pimco says it will dedicate a new Founders Room in their honor at its Newport Beach headquarters. In addition, the fund group will name Gross a director emeritus and set up a yearly Bill Gross Award to recognize his focus on charitable activities.
“Bill Gross has always been larger than life,” said Dan Ivascyn, Pimco’s group chief investment officer, in a statement. “He has a well-deserved stellar reputation as an investor and a philanthropist. Bill has had an enormous influence on Pimco and the careers of many who have passed through its halls.”
Messy Ending
One year after he was pushed out of the bond fund shop he founded, Gross decided to sue Pimco and its parent company, Allianz. His complaint was emotional.
“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 … 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. Their improper, dishonest and unethical behavior must now be exposed,” it stated.
The portfolio executive was the victim, according to the suit.
“Mr. Gross’s ongoing success at Pimco proved to be his undoing. In the minds of certain younger executives …, Mr. Gross’s ongoing presence at the company checked their own financial and career ambitions,” the suit stated.
