(Bloomberg) -- Pimco may not win a quick end to Bill Gross’s lawsuit claiming he’s owed hundreds of millions of dollars after being forced out of the firm he co-founded 45 years ago.
A California state judge tentatively ruled that Gross met minimum requirements to go forward with his wrongful-termination action against Pimco.
“Gross alleges sufficient facts based on allegations concerning his status as the founder, a 40-year history, an alleged track record of bringing success and/or fame to the enterprise, as well as a series of alleged oral promises/assurances of continued employment,” Superior Court Judge Martha Gooding in Santa Ana, Calif., said in her decision, issued before a hearing scheduled for today.
Pimco says the case should be thrown out because Gross failed to show he had any agreement with the firm guaranteeing his employment. The company also argued in a court filing that its profit-sharing plan clearly provides no basis for him to allege he was improperly deprived of bonuses for two quarters.
“Pimco is confident that it will prevail when the parties present their evidence to the court,” the company’s lead counsel, David Boies, of Boies, Schiller & Flexner, said in a statement.
The judge will issue a final decision on the company’s request to immediately end the case after listening to further arguments from both sides. She won’t rule on the merits of Gross’s allegation that his resignation wasn’t truly voluntary and that Pimco breached its contract with him. The only question before her now is whether there’s a legal basis for his claims.
Gross left Pimco in September 2014 amid a public falling out with other managing directors after lagging results at the Pimco Total Return Fund, then the world’s largest mutual fund, led to a flood of redemptions. The money manager sued a year later, claiming he was ousted so that Pimco wouldn’t have to pay him his $200 million cut of the bonus pool and his rivals could increase their compensation.
Gross, who built Pimco on fixed-income investments, opposed the company’s expansion into higher-risk asset classes such as equities, commodities, real estate and hedge fund-like products, according to his complaint.
Gross, 71, now co-manages the $1.26 billion Janus Global Unconstrained Bond Fund, which has gained 0.9% this year while almost breaking even since he took over management in October 2014, according to data compiled by Bloomberg. Gross has said he will donate any award or settlement from the lawsuit to charity.