Pimco has agreed to pay $81m to settle the lawsuit from its founder Bill Gross, who claimed he was illegally ousted from the asset manager in 2014, according to people familiar with the deal.

Mr Gross had claimed he was owed at least $200m in lost bonuses and compensation, as a result of a management uprising that forced him out as the company’s chief investment officer. Pimco had denied the claim, saying his erratic behaviour meant he could have been fired.

Mr Gross’s abrupt resignation in September 2014 shocked the world of fixed income investing, and led to large outflows from Pimco’s main bond funds.

The settlement money will be paid to Mr Gross’s family foundation, and Mr Gross is set to promise he will top up the foundation with a further $20m donation. The deal is due to be lodged with a California court shortly.

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