NEW YORK (AP) — Billionaire bond investor Bill Gross has sued his former employer, Pimco, for more than $200 million for breach of contract and plotting to oust him from the firm he founded more than four decades ago.
The suit, filed Thursday in Orange County, California, alleges that Pimco executives plotted to remove Gross in an internal power struggle that eventually led to him leaving the company in September 2014.
Pimco, which is based in based in Newport Beach, California, said the lawsuit has no merit and the firm will respond in court.
The lawsuit focuses on the conflict between Gross, Mohammed El-Erian — once considered Gross' successor at Pimco — and other executives at the firm. In it, Gross contends that El-Erian wanted to move Pimco out of its traditional bond funds and into other types of investments, often with higher risk and higher returns.
After a protracted fight, El-Erian left Pimco in 2014 in what became a very public departure. He remains an economic adviser for German insurer Allianz SE, Pimco's parent company.
Gross contends that El-Erian's messy departure gave other executives the leverage to remove Gross from his positions of power, eventually leading to Gross leaving the company. He later joined the mutual fund company Janus, where billions of investment dollars followed him.
Gross founded Pacific Investment Management Co., better known as Pimco, in the 1970s. Over the years, he and Pimco would become the biggest names in fixed-income mutual funds — his face a constant presence on CNBC and other business news channels. Pimco's Total Return Fund, overseen directly by Gross, was by far the biggest bond fund with more than $300 billion in assets at its peak. The firm's success made Gross a billionaire.
In the lawsuit, Gross demands a jury trial and no less than $200 million in damages, citing a violation of his employment contract with Pimco and the compensation he would have received had he not left Pimco suddenly.
Patty Glaser, lead attorney for Bill Gross, said in a statement that all proceeds from the lawsuit will go to charity.