Ex-TCW Employee Testifies About Office Space Search Before Gundlach Firing
By Edvard Pettersson – Aug 3, 2011 12:40 AM ET
VanEvery testified yesterday at a trial in which she, Gundlach and two other former TCW employees are accused setting up DoubleLine with stolen trade secrets and proprietary information. They have countered that TCW fired them to avoid paying Gundlach’s group hundreds of millions of dollars in performance fees.
Under questioning by TCW’s lawyer, VanEvery said she retained a real estate broker in September of 2009 to find office space because she expected that either Gundlach would get fired or that he and his group would leave TCW through a negotiated departure.
“I was under the impression that something was going to happen by December,” VanEvery told jurors yesterday in state court in Los Angeles. “It was coming to a head. I felt there was going to be some kind of separation.”
Gundlach, 51, was the investment chief at TCW, the Los Angeles-based unit of Societe Generale. (GLE) He started DoubleLine in December 2009, 10 days after TCW fired him. TCW sued Gundlach a month later, after half of its fixed-income professionals had joinedDoubleLine. Gundlach countersued, saying he was fired so that TCW wouldn’t have to pay management and performance fees.
DOWNLOADING TCW INFORMATION
Also yesterday, Jeffrey Mayberry, who like VanEvery is a defendant and counterclaimant in the case, testified that he started downloading TCW information, including a mortgage-backed securities database and client portfolio holdings on Sept. 3, 2009. He said that was when people in Gundlach’s unit thought TCW Chief Executive Officer Marc Stern was about to fire Gundlach.
Mayberry said he started downloading at the instruction of his supervisor, Cris Santa Ana, the fourth former TCW employee involved in the case. Santa Ana sat at a work station next to him at TCW’s trading desk and used an external hard drive to download data on a daily basis, Mayberry said.
Mayberry, who was fired at the same time as Gundlach and joined his new firm soon after, said under cross-examination by DoubleLine’s lawyer that, at the new firm, they weren’t allowed to use any files they had that were created by TCW.
TCW alleges that Gundlach and the others wouldn’t have been able to get DoubleLine up and running as quickly as they did without use of TCW’s proprietary information.
While he was at TCW, Gundlach managed or oversaw about $70 billion of the company’s $110 billion in assets, according to the May 14, 2010, amended cross-complaint.
TCW clients withdrew about $25 billion after Gundlach was fired. TCW said in its complaint that Gundlach lied to its clients in a series of webcasts in December 2009 to incite them to join DoubleLine and to malign TCW’s newly acquired fixed- income management unit, Metropolitan West Asset Management LLC.
DoubleLine claims TCW clients started withdrawing billions of dollars immediately after Gundlach was fired and before any webcasts.
VanEvery testified that she used a computer file with contact information she got at TCW to help set up a webcast with investors shortly after Gundlach was fired. The file was created by an outside vendor, according to VanEvery.
“People were calling us at home,” VanEvery said. “They were concerned about the condition their portfolios were left in.”
VanEvery is scheduled to finish her testimony today.
The case is Trust Co. of the West v. Gundlach, BC429385, California Superior Court, Los Angeles County.
To contact the reporter on this story: Edvard Pettersson in Los Angeles email@example.com
To contact the editor responsible for this story: Michael Hytha at firstname.lastname@example.org