Bill Gross and Pacific Investment Management Co. (PIMCO) have come to terms in a breach-of-contract suit the money manager filed in 2015, a year after Gross was ousted from the firm he co-founded.
According to published reports, PIMCO agreed to pay $81 million to settle Gross’s claim, which will be donated to the billionaire’s family foundation. The two sides announced the accord in a joint statement Monday, calling the agreement “amicable.”
“PIMCO has always been family to me, and, like any family, sometimes there are disagreements,” Gross said in the statement, which added that he is glad “to know that PIMCO is in capable hands.”
Gross, 72, sued PIMCO in 2015, claiming his dismissal from the company constituted a breach of contract, and a breach of covenant of good faith and fair dealing. Gross said at the time that he suffered damages in excess of $200 million, after he resigned and jumped to Janus Capital Group Inc., contending (in the first sentence of the lawsuit that he was pushed out of the company by a “cabal” of PIMCO managing directors who were “driven by a lust for power, greed, and a desire to improve their own financial position.” He also asserted in the suit that the executives wanted to offer more high-fee products to investors rather than PIMCO’s traditional bond funds.
As part of the agreement, PIMCO acknowledged Gross’s contribution as a co-founder of the firm and named him as a director emeritus of PIMCO’s charitable foundation. The company is also dedicating a “Founders Room” in honor of Gross and others at its headquarters and establishing an annual “Bill Gross Award” through the foundation to recognize his philanthropy.
“Bill Gross has always been larger-than-life,” Dan Ivascyn, who replaced Gross as PIMCO’s group chief investment officer, said in the statement. “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 his talents.”
The trial was scheduled to begin in September.
