A bitter trial that rattled the normally quiet world of mutual funds came to an unusual end on Friday, as a jury awarded Jeffrey E. Gundlach, a star bond fund manager, millions of dollars in unpaid compensation even though it found him liable for breaching his fiduciary duty and stealing trade secrets at his former firm, Trust Company of the West.  Jurors took two days to find Mr. Gundlach and three co-defendants liable for taking trade secrets from Trust Company of the West, known as TCW, after he was fired in December 2009. It also found all four liable for breaching their fiduciary duty to TCW and Mr. Gundlach liable for interfering with investor contracts.  But, in a twist, the jury awarded no damages to TCW for the breach and contract claims. Instead, the jury awarded Mr. Gundlach and his co-defendants $66.7 million in damages related to a countersuit he filed against TCW, in which he contended that he was owed millions of dollars in fees for the funds he ran.  Although they held Mr. Gundlach liable for theft of trade secrets, the jurors found that the documents and electronic files he and his co-defendants took out of TCW were not stolen maliciously. Judge Carl J. West, who presided over the case in Los Angeles County Superior Court, will determine damages for the trade secrets issue at a later date. TCW said on Friday that it was seeking $89 million in that claim.  Lawyers for both sides rushed to claim victory after the verdict was read. Susan Estrich, a lawyer for TCW, said the jury had effectively validated the firm’s claims.  “We came in here focused on basic principles and wrongful conduct,” Ms. Estrich said. “We brought three claims, and the jury found liability on all three claims.”  But Mr. Gundlach’s camp, $66.7 million richer, was celebrating, too.  “We are pleased that the jury agreed with us that neither Jeffrey Gundlach nor any of our clients did anything that resulted in monetary harm to TCW,” said Brad Brian, a lawyer for Mr. Gundlach. “We’re equally pleased that the jury awarded Mr. Gundlach and our other clients the wages that were owed to them.”  TCW has not said whether it plans to appeal the verdict on Mr. Gundlach’s back pay.  The mixed verdict capped a trial that lasted nearly two months and seemed, at times, more like an argument between jilted lovers than a white-collar employment dispute.  Lawyers for TCW accused Mr. Gundlach of conspiring to sabotage his firm, comparing him to Gordon Gekko, the fictional buyout villain played by Michael Douglas in the movie “Wall Street.” Mr. Gundlach’s lawyers, in return, asserted that TCW had plotted to fire him for months and wanted to save money on the lucrative fees it owed him.  Over the course of six weeks of testimony, witnesses in the trial described Mr. Gundlach, who was named fixed-income manager of the year by Morningstar in 2006, as a “cultural cancer” who berated colleagues in the open and displayed unchecked arrogance. In closing arguments, lawyers for TCW presented a slideshow of some of Mr. Gundlach’s greatest hits, including e-mails in which he referred to himself as the pope and to Philip A. Barach, his co-manager, as “the B team.”  TCW contended that Mr. Gundlach and his associates stole client information and proprietary trading systems in order to set up a competing firm, DoubleLine Capital. More than 40 employees from TCW followed Mr. Gundlach to DoubleLine, which was running less than a month after Mr. Gundlach was fired from TCW.  Among those employees were Cris Santa Ana, Barbara VanEvery and Jeffrey Mayberry, all of whom were Mr. Gundlach’s co-defendants.  On Friday, Mr. Gundlach, dressed in a pinstripe suit and a bright orange tie, looked straight ahead as the jury’s verdict was read, according to a live feed of the trial provided by CourtroomView.  For industry watchers and nervous investors, the jury’s decision came as something of a relief.  “This divorce has been messy, and it’s a good thing that the investment teams can now go back to managing portfolios without this distraction hanging over them,” said Miriam Sjoblom, a bond fund analyst with Morningstar. “To the extent DoubleLine shareholders were worried about damages from this suit impacting the resources of the firm, this verdict should assuage those fears.”  Mr. Gundlach, an avid art collector and unabashed bon vivant, has done well since leaving TCW. His DoubleLine total return bond fund is among the top performers in its class, and the firm announced on Friday that its overall assets under management had passed $16 billion, a stunningly quick gain for a firm less than two years old.  TCW, a unit of the French bank Société Générale, struggled in the immediate wake of Mr. Gundlach’s departure. The firm lost billions in assets after he left, even though it acquired a competitor, Metropolitan West, to replace his team.  Today, TCW is on the mend. It has about 600 employees, and the firm’s assets under management have grown to $120 billion. In a fact sheet distributed to reporters during the trial, the firm said it had developed “a more collegial, collaborative workplace culture” since 2009.  But that newfound collegiality has not extended to Mr. Gundlach, as evidenced by the angry and often brutal case the firm made against its former star. Experts say that although the trial could have been a landmark employment case about the merits and dangers of competing against a former employer, it turned out to be nearly all sound and fury.  “This is a split-the-baby decision,” said Jill E. Fisch, a law professor at the University of Pennsylvania. “It didn’t resolve any questions about how much you can compete, and it seems like it was a long expensive battle that could have been avoided.”  Correction: September 21, 2011 An article on Saturday about the verdict in a legal dispute between Jeffrey E. Gundlach, a bond fund manager, and his former employer, Trust Company of the West, misstated one of the jury’s findings. The jury found Mr. Gundlach and three co-defendants liable for breaching their fiduciary duty to Trust Company, known as TCW, not their fiduciary duty to investors.
A judge will determine the damages for TCW’s trade secret claim, but Jeffrey Gundlach appears to be the financial winner with an award of $66.7 million in back pay.