Bill Gross Wins Access to Some Pimco Records in Bonus SuitBy
Pimco co-founder claims he was ousted by ‘cabal’ in 2014
Firm said information he sought is irrelevant to case’s claims
Pimco co-founder Bill Gross won access to some of the firm’s internal records he says will show he was forced to resign two years ago so his former colleagues could divvy up his $200 million bonus among themselves.
A state court judge in Santa Ana, California, handed a partial victory Monday to Gross in his document quest, while also placing limits on the information that Pacific Investment Management Co. must turn over. The judge also cautioned both sides against “gamesmanship” in pretrial information sharing, known as discovery.
Gross, 72, who claims he was ousted from Pimco by a “cabal,” now runs the $1.5 billion Janus Global Unconstrained Bond Fund. He was trying to force Pimco to hand over internal records on its investment strategy and compensation practices for other executives that he says are needed to pursue his lawsuit.
California Superior Court Judge Deborah Servino ordered Pimco to provide Gross with documents regarding his resignation in September 2014 and the decision not to pay him his share of the bonus pool for the quarter in which he left. She said Pimco doesn’t need to disclose records on the allocation of its bonus pool beyond 2014. Gross wanted those records up to the present.
‘Hide the Ball’
“We are very pleased with the judge’s ruling, which now allows us to tell the full story of PIMCO’s wrongful actions and deceit.," Gross’s lawyer, Patty Glaser, said in a statement. She made a special reference to Pimco managing director Andrew Balls, whom Gross has accused of leaking information to the media to harm him.
“Not only does the ruling force PIMCO to comply with all of our deposition requests, it forces PIMCO to disclose documents that prove how Andrew Balls and a cabal of high-ranking managing directors methodically conspired to force out Bill Gross so they could improve their own financial position and reputation at the expense of investors and decency,” Glaser said.
Gross’s lawyers argued at a Sept. 16 hearing they needed access to Pimco’s 2015 bonus allocations to know what happened to “his” share, since that could support their claim Gross was forced out so that the other managing directors could divide his cut of the bonus pool among themselves.
The Newport Beach, California-based asset management firm argued that Gross’s requests are irrelevant to the narrow employment claims at stake in the lawsuit. Pimco’s lawyers said he sought every piece of information about its business and its interactions with government regulators, plus records of every meeting of its most senior executives over the past five years.
“As to the majority of Mr. Gross’s requests, the court held that ‘the far-reaching categories of documents sought here are impermissibly broad and unreasonable,” Pimco’s lawyer, David Boies, said in an e-mailed statement. “We will promptly provide the additional discovery that the court held is appropriate. As we have said all along, Mr. Gross’s entire lawsuit is without merit, and we look forward to defeating his claims.”
Among the Gross requests the court deemed too broad was his demand to see Pimco’s communications with the Securities and Exchange Commission.
Servino granted Gross’s request to order depositions of Pimco executives, including its in-house lawyer, saying he may have information that isn’t protected by the rule that keeps attorney communications with clients confidential.
The case is Gross v. Pacific Investment Management Co., 30-2015-00813636, California Superior Court, Orange County (Santa Ana).