August 3, 2011 / 1:40 AM / 8 years ago

UPDATE 1-Gundlach asked Goldman Sachs aid vs TCW--co-worker

* Goldman declined to get involved -co-worker testimony

* TCW and bond star Jeffrey Gundlach in high-stakes trial

* “King of bonds” formed new firm soon after firing

* Ex-TCW exec Mayberry copied info to parents’ computer (Recasts with Goldman Sachs meeting)

By Mary Slosson

LOS ANGELES, Aug 2 (Reuters) - Star bond manager Jeffrey Gundlach was exploring the possibility of leaving Trust Company of the West — unsuccessfully seeking advice from Goldman Sachs — a month before it fired him, a Gundlach co-worker and girlfriend testified in court.

TCW has sued Gundlach for theft of trade secrets and creating unfair competition in the market, among other allegations, and Gundlach counter-sued, alleging that TCW owed him wages. The case was consolidated into one trial that could be worth hundreds of millions of dollars to the winner.

Gundlach, known as the “king of bonds,” had worked for TCW since 1985 when he was terminated in late 2009. TCW said he had threatened to take action “that could have jeopardized the firm’s ability” to manage clients’ fixed-income assets.

A few weeks after his firing, Gundlach set up asset management firm DoubleLine Capital, and roughly 40 TCW employees who had worked under him migrated to the new firm.

Gundlach met with Goldman Sachs (GS.N) in November 2009 along with at least two other coworkers to seek advice on negotiating a deal with TCW — or, if that failed, on leaving and forming a new company, Barbara VanEvery testified on Tuesday.

“I think he dreamt of one day having his own business,” VanEvery, who was at the Goldman meeting, said at one point while being questioned by TCW attorney Steve Madison.

Goldman declined to act as intermediary in a deal with TCW, VanEvery said, and encouraged Gundlach to talk to TCW directly. VanEvery didn’t say whether Gundlach ever did talk to TCW, and Gundlach was fired the following month.

A Goldman representative declined to comment on Tuesday.

VanEvery worked for Gundlach at TCW and followed him when Gundlach left to set up DoubleLine Capital in late 2009. She testified that she was also romantically involved with Gundlach at the time of the move.

Attorneys for DoubleLine did not question VanEvery on Tuesday, and her testimony is scheduled to continue on Wednesday in a Los Angeles courtroom.

However, during opening statements last week, Doubleline attorney Brad Brian said the deal Gundlach was seeking with TCW could have involved staying with the company after securing a better financial deal and a management change.

Another option was spinning the company off from French bank Societe Generale (SOGN.PA), of which TCW is a unit, Brian said. Leaving TCW and forming a brand new company was another option being considered at the Goldman Sachs meeting, he said.

Earlier on Tuesday, another co-defendant, Jeffrey Mayberry, said he had copied the entire contents of a flash drive with TCW information he hid from a company investigator onto his parents’ personal computer. He did not tell them that he did so.

“At that point I decided the less people that knew, the better,” Mayberry said, under questioning by a TCW attorney.

Under subsequent questioning by attorneys for DoubleLine, Mayberry said he and other former TCW employees were instructed not to use any TCW data.

DoubleLine then created new systems of its own, Mayberry said.

The case in Superior Court of California, County of Los Angeles is Trust Co of the West v. Jeffrey Gundlach et al, BC429385. (Reporting by Mary Slosson, editing by Dan Levine, Matthew Lewis, Gary Hill)

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