Jeffrey Gundlach as soon as accused his former employer, TCW Group Inc., of diluting his stake within the firm. Now the billionaire founding father of DoubleLine Capital is battling accusations that he did one thing just like executives who helped him construct his $96 billion bond big.
A number of former restricted companions and associated trusts allege in authorized filings that the agency and its founder used a lowball estimate to worth their shares once they departed and redistributed among the fairness to himself, in keeping with court docket papers.
DoubleLine and Gundlach, 63, denied any wrongdoing and received a non-public arbitration continuing in April of final yr, however the former companions are asking the Delaware Chancery court docket to throw out that call. A listening to has been set for October.
The previous DoubleLine companions, who first raised the problem a number of years in the past, embrace Joel Damiani, Susan Nichols Steinbach and Philip Barach.
They have been joined by three of Barach’s relations appearing as trustees, in addition to Mustapha Baha — whose spouse, Bonnie, died in 2016 and was additionally a associate.
The previous companions contended in a January submitting that the panel disadvantaged them of the appropriate to a good listening to as a result of they weren’t allowed to current what they are saying is vital proof — among the agency’s communications with its valuators.
The communications might have proven that DoubleLine interfered to deflate the evaluations, leaving them “tainted,” the executives claimed. The corporate did this to cut back the sum of money they needed to pay the execs once they left their jobs, the doc stated.
DoubleLine instructed the court docket in a March submitting that it had produced valuation studies and virtually 500 pages of communications with the valuation agency, and the previous executives had no foundation for speculating that extra paperwork would have unearthed a “smoking gun.”
The agency requested the court docket to uphold the arbitrators’ opinion, and to award DoubleLine attorneys’ charges.
“The arbitration panel unanimously resolved this matter in our favor way back,” DoubleLine spokesperson Loren Fleckenstein stated in an e-mail message, including that the agency is simply ready for the court docket to “formalize the panel’s findings.”
Legal professionals representing the previous companions and associated trusts didn’t reply to messages in search of remark.
Different Asset Administration Tussles
The drawn-out litigation is certainly one of a number of current spats amongst mega various asset managers.
Hedge fund big Two Sigma Investments revealed in a regulatory submitting earlier this yr that disagreements between its founders, John Overdeck and David Siegel, pose a fabric danger to buyers.
At personal fairness store Blue Owl Capital Inc., months-long tensions between co-founders prompted the agency to re-brand its enterprise models in a public present of unity — together with one unit that had been named after one of many co-founder’s kids.
Gundlach — who based DoubleLine in 2009 — has additionally tangled along with his former employer, TCW, which accused him of stealing commerce secrets and techniques after his ouster.
Gundlach, in flip, accused the corporate of reneging on a vow to not dilute his stake within the agency. In September 2011, a jury awarded him and three colleagues $66.7 million for unpaid wages, although it additionally discovered he’d misappropriated commerce secrets and techniques.
