'Bond King' Bill Gross sues Pimco for $200m

Bill Gross, Wall Street's "Bond King", is suing Pimco for $200m (£130m) after resigning as head of the bond fund last year.

He claimed colleagues forced him out so they could get his share of the $1.3bn bonus pool.

Mr Gross said the Pimco bosses were "driven by a lust for power, greed, and a desire to improve their own financial position".

Pimco said the legal action had no merit.

"Our legal team will be responding in court in due course," a spokesperson said.

Pimco's parent company, the German insurer Allianz, also said the lawsuit had no merit.

Mr Gross, 71, said he had been "on track" to receive a bonus of more than $250m last year out of Pimco's $1.3bn bonus pool.

He claimed that younger Pimco executives plotted to force him out and get his 20% stake in the bonus pool.

The lawsuit takes to new levels the animosity between Mr Gross and Pimco, which he co-founded and expanded over four decades into the largest US bond fund.

Pimco's flagship Total Return Fund performed poorly last year and many investors withdrew funds, with assets falling below $100bn after peaking at close to $300bn in April 2013.

Mr Gross's management style was also questioned after his deputy, Mohamed El-Erian, resigned in early 2014.

In the complaint, Mr Gross said a difference in strategy resulted in a falling-out with Mr El-Erian, who is now chief economic adviser at Allianz.

He said Mr El-Erian wanted to give investors an "extensive and varied menu" of investment choices, while Mr Gross favoured a "bonds and burgers" focus.

Mr Gross now runs a much smaller bond fund for Janus Capital.

The lawsuit - filed in the California Superior Court in Orange County - accused Pimco of constructive termination, breach of contract and exercising bad faith.

Patty Glaser, Mr Gross's lawyer, said any damages won would be donated to charity.

John Brynjolfsson, a former Pimco managing director and colleague of Mr Gross, said: "I was saddened to hear Bill felt it necessary to revisit this already well-aired dirty laundry. I suspect all his confidants told him to move on."

Mr Gross is worth an estimated $2.3bn.