Gundlach said at the time that TCW was resorting to "gutter tactics." Later, he said that whatever the company found in his offices were "vestiges of closed chapters of my life."
TCW sought to have that part of the suit included in the trial, but has been rebuffed by presiding Judge Carl J. West.
The trial will center on why TCW ousted Gundlach on Dec. 4, 2009. In its lawsuit, the firm alleges that Gundlach and key members of his bond team began to plot in the fall of 2009 to leave en masse and form DoubleLine. Some of Gundlach's team members began downloading millions of pages of TCW proprietary information on bond holdings, clients and prospective clients, the suit says.
Once it discovered Gundlach's plans, TCW says, it had no choice but to dismiss him. The firm simultaneously bought another L.A. bond manager, Metropolitan West Asset Management, to replace him.
Susan Estrich, a lawyer for TCW at Quinn Emanuel, denied that TCW held a personal grudge against Gundlach. "But certain conduct cannot be tolerated," she said. "When senior officers of a company steal 9 million documents, plot to leave the company and its investors in the lurch, the company cannot sit on its hands."
On Dec. 14, 2009, 10 days after he was fired, Gundlach launched DoubleLine. Within a few weeks the majority of his TCW bond team members jumped ship to join him. And with Gundlach gone, some TCW investors quickly fled, yanking $25 billion from the company by mid-February 2010.
Gundlach has denied that he sought to sabotage TCW. But he has said he was "distraught" when Stern was named chief executive in June 2009 because, he said, TCW had promised to turn the reins over to a younger generation of managers, including himself.
His suit against TCW alleges that he was fired because TCW and Societe Generale wanted to avoid having to share up to $1.25 billion in future fees from assets Gundlach managed.
Lew Phelps, a spokesman for DoubleLine, said TCW in mid-2009 "convinced the firm's parent company, Societe Generale, to approve a plan to fire Jeffrey, cheat him out of his compensation and steal all the profits. We also will show that TCW's claims against Jeffrey are trumped-up pretexts designed to conceal their own misconduct and interfere with a more able competitor."
As for the alleged theft of TCW data, Gundlach's countersuit asserts that even though information was downloaded it wasn't used and was quickly returned to TCW.
Brouwer, the financial advisor, said he wasn't dissuaded from investing with Gundlach because of TCW's allegations. He said he considered the suit to be "basically sour grapes."
Nor did the legal challenge keep Barron's magazine earlier this year from crowning Gundlach "King of Bonds" — an honorific that for the last decade or more has usually gone to bond guru Bill Gross at the Pimco funds in Newport Beach.
Although Gundlach's healthy ego is well-known on Wall Street, Brouwer said it's also what has drawn many investors to him. In money management, Brouwer said, "You have to have somebody who has a very strong faith in his view of the world."