Bloomberg is reporting that Jeffrey Gundlach, the embattled former bond trader from TCW heralded as "the Pope" by Wall Street's bond community, has testified under examination that he attempted to purchase TCW from its owners prior to being fired.
Gundlach, who started DoubleLine weeks after TCW fired him in December 2009, told a Los Angeles jury today that he offered about $350 million for 51 percent of the firm. He made the offer at a meeting with TCW Chief Executive Officer Marc Stern when he believed he was about to get fired, Gundlach said under questioning by TCW lawyer John Quinn.
Gundlach, whose mortgage-backed securities group managed more than half of TCW’s assets under management, said Stern was making a wrong assumption to think his group’s business would continue as normal if he was fired. At the meeting, members of Gundlach’s group indicated they would leave as well should Stern fire him.
“If you fire me, you’re going to blow up the firm,” Gundlach said, describing his reaction to what he thought was Stern’s plan.
TCW's super-lawyer, Quinn, had additional questions for Gundlach regarding his motives in offering to buy TCW. Quinn showed jurors a Sept. 16, 2009, e-mail from Philip Barach, the No. 2 person in Gundlach’s group at TCW who also joined DoubleLine, saying that, after Gundlach had been reassured by Stern that he wasn’t getting fired, they now had the “the luxury of time to plan and prepare.” Gundlach said “it was completely untrue” that he sought a better relationship with Stern after the Sept. 3 meeting only to buy time to set up his own firm and leave TCW.
The trial continues . . . .