January 30, 2024

Munger, Tolles & Olson Successfully Defends DoubleLine Capital and its Founder Against $500 Million Securities Lawsuit

Munger, Tolles & Olson has successfully secured confirmation of an arbitration award denying all claims facing DoubleLine Capital and its founder Jeffrey Gundlach in a securities lawsuit seeking over $500 million in damages.

MTO represented DoubleLine and Mr. Gundlach in a JAMS arbitration against several former partners who alleged that their equity interests in the company were wrongfully diluted. MTO brought counterclaims, including a claim for declaratory relief to affirm the validity of a determination by the company’s Board of Managers that two former partners engaged in wrongdoing that justified “conversion” of their equity to a status with far lower value.

After a bifurcated two-phase arbitration which took place over three weeks in 2021, an arbitral panel—two retired federal judges and the managing director of the JAMS arbitration practice— issued an arbitration award rejecting all of the Claimants’ claims and ruling in favor of MTO’s clients on the declaratory relief claim.

The parties filed cross-motions for summary judgment, seeking to confirm and vacate (respectively) the final arbitration award. MTO argued that the Claimants were unable to “climb [the] nearly vertical hill” that is necessary to vacate an arbitration award. MTO made oral arguments on October 5, 2023. Agreeing with MTO’s motion to confirm, the Delaware Chancery Court found that Claimants’ arguments were not strong enough to propel them to the high summit of vacatur and confirmed the arbitration award on January 25, 2024.

The MTO team on the case included partners Laura Smolowe and John Gildersleeve.

The lawsuit garnered media coverage in Bloomberg Law, CityWire and ThinkAdvisor.

About MTO’s Securities Practice

Our unwavering focus on disposing of shareholder claims quickly and effectively, often in extraordinary and unprecedented circumstances, sets us apart. Our securities team, which is ranked nationally by Chambers USA, brings exceptional judgment, creativity, and agility to solving problems from securities class actions after stock-price declines, to derivative actions against directors and officers, to corporate governance and M&A litigation, to SEC investigations and related pre-litigation challenges.

Learn more about our securities practice.