(Bloomberg News) TCW Group Inc. and Jeffrey Gundlach, its former chief investment officer, said they settled a lawsuit over Gundlach's firing in 2009 and allegations he stole trade secrets to set up his own firm.
TCW and the company founded by Gundlach, DoubleLine Capital LP, "jointly announce that they have settled all claims between and among themselves as well as DoubleLine Funds Trust, Jeffrey Gundlach, and other individuals," TCW said yesterday in a statement. "The terms of the settlement are confidential and the parties will not discuss them." DoubleLine separately issued a statement confirming the agreement.
TCW, the Los Angeles-based unit of Societe Generale SA, sued Gundlach in January 2010 after more than half of its fixed- income professionals joined DoubleLine. TCW said at trial that it suffered $566 million in damages. In September, a jury awarded Gundlach and three other former TCW employees who had joined his firm $66.7 million in unpaid wages.
The Los Angeles jury also found that Gundlach had breached his fiduciary duty to TCW, without awarding the firm any damages. California Superior Court Judge Carl West was to decide what "reasonable royalties," if any, TCW was entitled to based on the jury's finding that Gundlach had misappropriated trade secrets.
Gundlach, 52, who had worked at TCW for 25 years and was named Morningstar's Fixed Income Manager of the Year in 2006, countersued, saying TCW fired him to avoid having to pay management and performance fees for the distressed-asset funds his group managed and that went "through the roof." Gundlach sought about $500 million.
"We're pleased that an agreement has been reached and that matter is now behind us," Peter Viles, a TCW spokesman, said. "TCW is well positioned to continue the strong momentum and growth it has established over the past two years."
The case is Trust Co. of the West v. Gundlach, BC429385, California Superior Court, Los Angeles County (Los Angeles).