Pimco has stepped up a legal war of words with its former chief investment officer Bill Gross, saying he could have been fired for abusing his colleagues in the months leading up to his abrupt resignation in 2014.
The fixed income asset management company on Monday filed its response to Mr Gross's claim that he is owed at least $200m in lost bonuses and compensation.
Pimco failed last month in an attempt to have the lawsuit thrown out, opening up the prospect of a long and potentially embarrassing series of hearings and disclosures about its culture and remuneration.
The company has been working to stem customer outflows since Mr Gross shocked the asset management industry by walking out in September 2014. Mr Gross, meanwhile, has been working to re-establish his reputation as the "bond king" at Janus Capital, a smaller firm.
Pimco's formal response to Mr Gross's complaint puts him on notice that it plans to expose embarrassing details about what it calls his "self-destructive" final months at the company he helped build over 37 years.
Following the resignation of Pimco's chief executive, Mohamed El-Erian, in January 2014, and newspaper reports about conflict between the two men, "Mr Gross became consumed . . . with protecting his own public image above all else", Pimco says in its filing.
"In single-minded pursuit of that objective, he undertook a disruptive and unacceptable course of conduct that included breaking commitments to abide by management decisions, trying to sabotage the careers of the former CEO and others he suspected of disloyalty, and treating his colleagues abusively."
The new legal filing includes a facsimile of Mr Gross's handwritten 17-word resignation letter, left in the Pimco office at the dead of night. It also includes notes Mr Gross said he took of a call he made to a Reuters reporter in which he accuses her of being "wrapped around [Mr El-Erian's] finger".
Pimco has hired the famed trial lawyer David Boies to mastermind its defence to Mr Gross's suit, which was filed last October. In it, Mr Gross said he was effectively ousted by underlings who were "driven by a lust for power, greed, and a desire to improve their own financial position . . . at the expense of investors and decency".
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Mr Gross's lawyer came out swinging again on Monday, in response to Pimco's formal filing. "Notice they didn't have the chutzpah to badmouth Bill's performance," said Patty Glaser, partner at Glaser Weil Fink Howard Avchen & Shapiro. "In contrast to Pimco's characterization of itself as being more stable since Bill's ouster in September 2014, a review of the facts shows quite the opposite."
Pimco says Mr Gross could have been fired for cause if he had not quit, and had also verbally acknowledged that he would not be entitled to a bonus for the third quarter of 2014 if he quit before the end of September, as he did.