Mr Gross claimed that he became the target of a power struggle within Pimco, which led to his “wrongful and illegal ouster”.
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Armored Wolf, a money management firm based in Irvine, California.
Bill Gross is suing Pimco and its parent company Allianz or “hundreds of millions of dollars”, Bloomberg reports on Thursday.
The lawsuit presents a detailed account of the events leading up to Gross’s departure on September 26 a year ago, a move that rattled bond markets and prompted record redemptions at what once was the world’s largest mutual fund. It portrays Gross as an advocate for lower fees and traditional, lower-risk bond investments who was pushed out gradually by other executives seeking to expand into riskier assets and higher-fee products. Allianz or El-Erian could not be immediately reached for comment.
Mr Gross now runs a bond fund for Janus Capital.
Total Return’s assets peaked at $293 billion in April 2013, but have since fallen to below $100 billion.
The bond manager was expecting a bonus of around $250m for 2014, most of which was due in the second half of the year.
As pressure built, Gross said he began negotiating to resign as chief investment officer, cut his bonus, give up oversight of Total Return, and as “further humiliation” even be forbidden from entering Pimco’s offices in Newport Beach, California.
In the complaint, Gross said younger Pimco executives had plotted to drive him out, and share in the 20 percent of Pimco’s bonus pool to which he was entitled, because they believed his presence was impeding their careers and limiting their paychecks.
“Their improper, dishonest and unethical behaviour must now be exposed”.
The lawsuit accuses Pimco of constructive termination, breach of contract, and exercising bad faith.
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According to the Wall Street Journal, an attorney for Gross has said that he plans to donate any damages received from the case to charity.
