Gundlach countersues

He's the ex-bond fund manager at L.A.-based TCW Group who was ousted last December and then formed his own money management firm, taking a bunch of staffers - and clients - with him. TCW started this off by claiming in a lawsuit that before leaving the firm he and the other ex-employees had stolen proprietary information. TCW also said that porn mags, sex devices, X-rated DVDs, dope, and drug paraphernalia were found in Gundlach's office (he said they were "vestiges of closed chapters of my life"). Gundlach's countersuit, filed this morning in Superior Court, alleges that TCW fired him because it didn't want to share up to $1.25 billion in fees. That's what he's going for in the suit. From the press release:

The Cross-Complaint by Mr. Gundlach and the other individual parties named in TCW's original lawsuit states that in early 2007, Mr. Gundlach and TCW "negotiated and entered into a new agreement governing his employment and compensation," which superseded a signed 2003 employment contract. "Although the Oral Agreement was never reduced to a writing executed by the parties, its essential terms were fully negotiated and agreed to by the parties," the Cross-Complaint states. "At the time of his termination in December 2009, Gundlach's employment, including his compensation and certain compensation owed to members of his team, were governed by the Oral Agreement."

Oral, eh? That could be tough. Here's TCW's response:

"Mr. Gundlach's spin regarding the reasons for his termination are completely erroneous. As is well documented, this comes from an individual who earned $40 million dollars last year and $135 million over the past five years."

Earlier: TCW war turns nasty