PIMCO: Bill Gross ‘Freely and Knowingly’ Forfeited Compensation

Bill Gross “abruptly” ended his 43-year career at PIMCO with a brief handwritten letter left “in the middle of the night,” according to a new court filing by the firm.

Former colleagues first learned of Gross’ departure from a press release issued by his new employer, Janus Capital Group, early on the morning of September 26, 2014, PIMCO alleged.

The resignation notice, discovered afterwards, was addressed to “CEO, PIMCO” and simply read, “This letter will confirm my resignation from PIMCO as of Sept. 26th, 2014, at 6:29 am PST.”

“Mr. Gross ended his career at PIMCO with no notice or transition, disregarding the potential impact on the individual and institutional clients whose assets he was responsible for managing,” PIMCO said.

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The filing is PIMCO’s response to the $200 million lawsuit Gross filed in October, which accused PIMCO executives of scheming to push Gross out of the firm he founded.

In his original complaint Gross claimed he was “forced into a corner” after now-Group CIO Dan Ivascyn and other conspirators threatened to resign if “Gross were not driven from the company.”

In its response to the suit, PIMCO denied these accusations, alleging that it was instead Gross who “repeatedly resorted to threats to walk out the door at a moment’s notice if he did not get his way.”

“He undertook a disruptive and unacceptable course of conduct that included breaking commitments to abide by management decisions, trying to sabotage the careers of the former CEO and others he suspected of disloyalty, and treating his colleagues abusively,” PIMCO said.

Although Gross’ departure came by resignation, PIMCO said it would have been within rights to fire him based on his behavior in the months prior.

Gross has asserted that he is owed a bonus payment of nearly $80 million for the third quarter of 2014, as well as a 20% share of the company’s $1.3 billion bonus pool. However, PIMCO’s response claimed that Gross “freely and knowingly waived any right he might have had to such a payment.”

PIMCO claimed Gross had acknowledged that leaving before the end of the third quarter would result in “forfeiting any potential profit-sharing payment for that quarter” during a meeting on the day before his resignation.

“By suing the investment management firm where he made his career, Mr Gross seeks to salvage a personal legacy that he undermined with his own self-destructive behavior,” PIMCO argued.

PIMCO previously sought to have the case thrown out in November last year, claiming Gross’ arguments were “legally groundless,” but last month Judge Martha Gooding in California ruled that the lawsuit contained “sufficient facts” to proceed. No ruling has been made on the merits of the case, and a court date has yet to be finalized.

gross resignation 2 Source: Orange County Superior Court of California

Legal & General (L&G) is seeking to grow its international de-risking capabilities with the appointment of a new director of strategic transactions.

Matt Wilmington joined from consultancy firm Aon Hewitt, L&G said in a statement, and will lead on “strategic longevity, buy-in, and buyout transactions, focusing particularly on our large multinational client relationships.”

L&G broke new ground in 2014 with the completion of a multi-country pension de-risking project with automobile parts manufacturer TRW. The transaction involved a £2.5 billion ($3.6 billion) buyout of the company’s UK pension, as well as smaller de-risking moves for its Canadian and US pensions.

In a 15-year career at Aon Hewitt, Wilmington held a number of roles including overseeing the consultant’s non-UK pension-risk transfer business. Most recently, he was a partner in the group’s risk settlement team. He led advice on “a number of UK-based, large-scale, complex de-risking transactions,” L&G said.

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In the last 18 months, Aon Hewitt has advised on notable deals such as Alcatel-Lucent’s £300 million buy-in, completed at the start of this year, and a £675 million buy-in for the Lehman Brothers UK pension in May 2015.

“I’m confident that the strength and depth of the pension-risk transfer team will result in many innovative transactions being completed over the coming months and years, and I’m excited to be playing a part in that,” Wilmington said.