Pimco Asks Court to Throw Out Bill Gross’s Civil Suit
Firm calls suit ‘legally groundless and sad postscript’ to a storied career
Pacific Investment Management Co. on Monday asked a California court to throw out the civil lawsuit of bond investor Bill Gross, saying the complaint is “legally groundless” and a “sad postscript” to a storied career.
The Pimco filing says the breach-of-contract lawsuit, filed by Mr. Gross in October, is based on a “jumbled set of contract theories” and reads “more like a screenplay than a court pleading.”
“During his final year with Pimco, Mr. Gross engaged in a pattern of conduct that was incompatible with the values and standards that Pimco expected of those entrusted with his leadership,” the Pimco filing says. “ When Mr. Gross finally came to understand that Pimco wouldn’t exempt him from these standards, he abruptly resigned from the firm without notice or transition—disregarding the potential impact on the individual and institutional clients whose assets he was responsible for managing.”
An attorney for Mr. Gross said: “We are disappointed that Pimco has chosen to use a procedural tactic to delay getting to the merits of the case, but are confident in our case moving forward. Notably, Pimco’s papers do not dispute the substance of Mr. Gross’s allegations in any material way.”
A spokesman for Pimco declined to comment.
Mr. Gross, known formerly as the bond king for his long and successful tenure in the business abruptly left the firm he co-founded in September 2014 after tensions grew among executives, The Wall Street Journal has reported. Pimco, based in Newport-Beach, Calif., is a unit of German insurer Allianz SE,also named in Mr. Gross’s suit. Mr. Gross now manages a small bond fund at Denver-based Janus Capital Group Inc.
Last month, Mr. Gross unexpectedly filed the civil suit against Pimco, claiming that his former colleagues forced him out to advance their own careers and capture some of his large bonus. The suit, which asks for at least $200 million in damages, also says Mr. Gross agreed to accept a lesser role at the firm and be barred from its offices, only to have the deal reneged at the last minute. Mr. Gross is seeking to recoup a bonus of $80 million he says he is owed. The complaint was filed in the Superior Court of California, County of Orange. A spokesman for Mr. Gross, a billionaire, has said he plans to donate the proceeds of the suit to charity.
Pimco’s 15-page filing Monday, its first official response to the lawsuit, objects to each of Mr. Gross’s claims. The filing says Mr. Gross wasn’t eligible for a third-quarter bonus because of the “unambiguous text” of the company’s profit-sharing plan. The filing claims Mr. Gross fails to prove that Pimco offered him a position and then took it back, saying his complaint “never identifies a single difference” between his original offer from the firm and a subsequent offer. Mr. Gross’s claim he was forced to resign isn’t true, Pimco says in its filing, because he hasn’t proved that working conditions were “so intolerable or aggravated” that he was forced to leave.
While Mr. Gross’s lawsuit was filled with details about his final year at the firm, Pimco’s response largely answers only the legal claims.
Source: WSJ – Pimco Asks Court to Throw Out Bill Gross’s Civil Suit
