(Adds allegations and details from joint statement)
By Jonathan Stempel and Jennifer Ablan
NEW YORK, March 27 Bill Gross has reached a
roughly $81 million settlement of his lawsuit against Pacific
Investment Management Co, ending a bitter 2-1/2-year drama over
the well-known bond investor's abrupt departure from one of the
world's biggest asset managers.
Terms of the accord were not disclosed, but were confirmed
by two people familiar with the matter, who asked not to be
named because the terms were confidential.
Gross and Pimco said in a joint statement the settlement was
"amicable," and that Pimco will donate the proceeds to charity.
"Pimco has always been family to me, and, like any family,
sometimes there are disagreements," Gross, a Pimco co-founder,
said in the statement.
The accord quietly ends an acrimonious battle over the
72-year-old billionaire's September 2014 exit from Pimco, where
he had been chief investment officer. That battle played out
first in the media, and then in Gross' $200 million lawsuit.
Gross, who now works for Denver-based Janus Capital Group
Inc, left Pimco following negative reports about his
leadership and weak returns at Pimco Total Return,
once the world's largest bond mutual fund with $293 billion of
assets at its peak.
In his October 2015 lawsuit, Gross accused a greedy "cabal"
of Pimco executives, including group chief investment officer
Dan Ivascyn, of plotting to oust him so they could divide his 20
percent share in Pimco's bonus pool among themselves.
The pool totaled $1.3 billion in 2013, and Gross' pay that
year topped $300 million, according to the complaint filed in
California Superior Court.
Pimco, a Newport Beach, California-based unit of German
insurer Allianz SE, countered that Gross' "egregious
misconduct," including abusive behavior toward colleagues, would
have justified his firing had he not resigned.
Once known on Wall Street as the "Bond King," Gross left
Pimco eight months after his second-in-command Mohamed El-Erian
quit, in part because of Gross' management style. Gross is worth
$2.5 billion, according to Forbes magazine.
The joint statement reflected Pimco's recognition of Gross'
role in building the firm into a mutual fund powerhouse over
four decades, with more than $2 trillion of assets under
management, even if his last months proved uncomfortable.
"Bill Gross has always been larger-than-life," Ivascyn said.
"Bill has had an enormous influence on Pimco and the careers of
many who have passed through its halls. He built this business
from the ground up and we have great respect and admiration for
In the statement, Gross also said: "I've always been amazed
by my success, and grateful for the opportunity to make a
difference in the world. I'm glad that can continue."
Gross has been unable to replicate his Pimco success at
Janus. His Global Unconstrained Bond fund has just
$1.9 billion of assets, and been outperformed by 80 percent of
its peers in the last year, according to Morningstar.
Janus said last October it planned to merge with
London-based Henderson Group Plc.
Pimco said it will dedicate a "Founders Room" at its
headquarters to honor its co-founders, while its Pimco
Foundation named Gross a director emeritus and established an
annual award in his name.
The case is Gross v. Pacific Investment Management Co et al,
California Superior Court, Orange County, No. 2015-00813636.
(Reporting by Jennifer Ablan, Sam Forgione and Jonathan
Stempel; Editing by Phil Berlowitz, Andrew Hay and Jeffrey