The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:Did Gundlach Cost TCW $353M in Closed-End Fund Fees? Not Rated 0.0 Email Routing List Email & Route  Print Print
Friday, August 26, 2011

Did Gundlach Cost TCW $353M in Closed-End Fund Fees?

News summary by MFWire's editors

Trust Company of the West (TCW [see profile]) CEO Marc Stern predicted three months in advance of firing Jeff Gundlach that the chief investment officer would "part ways" with TCW, and Stern even secretly met in Paris with executives from TCW parent Societe Generale to discuss the plan to get rid of Gundlach two months in advance. Those pieces of the story came to light yesterday in court in Los Angeles, in the fight between TCW on one side and Gundlach (now CEO of DoubleLine [see profile]) on the other.

To read the rest of the story of the fight between Gundlach and TCW, click here.

Bloomberg, Pensions & Investments and Reuters all reported on Stern's testimony yesterday.

"The element of surprise was essential to the preservation of the company," Stern reportedly said to explain the secrecy surrounding "Project G," the plan to eliminate Gundlach, adding that he feared letting the secret out would create a "self-fulfilling prophesy."

The suit and counter-suit hinge on the one side on TCW's claims that Gundlach and his colleagues swiped trade secrets to start up DoubleLine, and on the other on Gundlach's claims that TCW dumped him to avoid shelling out hundreds of millions of dollars to his team.

Stern confirmed that he hid an October 2009 meeting with SocGen to talk about firing Gundlach. And jurors also saw a September 7, 2009 e-mail where Stern predicted that TCW and Gundlach would soon have to "part ways." At a meeting four days prior to that e-mail, Stern assured Gundlach that TCW wasn't firing Gundlach. TCW fired Gundlach three months later.

Also yesterday, TCW's Duke Heger claimed that, thanks to fee cuts clients demanded after Gundlach talked with them after his departure from TCW, TCW earned only $20 million in management fees and and $50 million in performance fees in 2010 on certain closed-end funds, compared to the $56 million and $367 million clients would've paid otherwise. Yet Heger confirmed that those fees would've gone to TCW subsidiaries TCW Asset Management Co. and TCW Special Mortgage Credits Fund II LLC, not TCW itself, and the judge ruled on July 21 that TCW could not amend its complaint to add those two subsidiaries. 

Edited by: Neil Anderson, Managing Editor

Stay ahead of the news ... Sign up for our email alerts now

 Do You Recommend This Story?

Return to Top
 News Archives
2022: Q1
2021: Q4Q3Q2Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Add to My Yahoo!
follow us in feedly

©All rights reserved to InvestmentWires, Inc. 1997-2022
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use