The return of the guru

George Gilder, the famous technology guru, led legions of newsletter followers into the future -- and then off a cliff when the stock market spit out the kinds of computing and telecommunications companies he had embraced.

Writing from Great Barrington with his trademark breathless enthusiasm, Gilder predicted a lot of what happened in the wired world, but then told people to pile into stocks like Global Crossing Ltd. and WorldCom Inc. The violent investment crash that ensued would have been a fatal career tragedy for most stock pickers. But today the world is awash in cash looking for new investment ideas, and Gilder is back, pitching a new hedge fund to wealthy admirers.

Gilder is no stranger to controversy, and his hedge fund ran into problems before a dime was raised. James Bender , a former partner, sued Gilder in April, claiming he was thrown overboard when plans for a modest investment fund began attracting serious money from the very rich and famous.

This is Bender's side of the story: A partnership had been formed in February among Gilder, Bender, and Frank McNamara , a lawyer who ran for Congress against Tip O'Neill ages ago and once served as US attorney in Massachusetts. Bender, once the chief executive of a publicly traded technology company, could scrub individual businesses that fit into Gilder's big investment picture. Gilder got 40 percent of the partnership; the others split the rest.

The partners tried their pitch on several people, including mutual friend and Harvard Business School professor Clay Christensen. Bender says they had expected to raise a modest fund, but then serious expressions of interest came from potential investors like onetime junk bond king Michael Milken , high-profile money manager Ken Fisher, and bigshot Hollywood agent Ari Emmanuel. No actual money had been raised, but soon the partners "soft circled" $250 million, an amount qualified people were indicating they'd invest.

By March, the partnership was dead. Bender says Gilder wanted out, and McNamara agreed to follow him without an equity interest. They proceeded with their hedge fund plans. Bender hired former state attorney general Tom Reilly , now of Greenberg Traurig in Boston, and sued both his former partners.

Gilder didn't return a call, and McNamara declined to talk about the case. But their lawyer, Michael Angelini of Bowditch & Dewey, filed a countersuit that tells a different story. It claims Bender didn't hold up his end of the partnership bargain and got tossed as a result.

Angelini points out that their agreement allowed the partnership to be dissolved at any time with a majority vote, which took place. He says all three partners were sophisticated people who dropped a business arrangement before it ever really got off the ground.

Reilly says the partners had a fiduciary responsibility to each other, regardless of the vote. Bender says he was pushed out when the pile of money on the table grew much larger than anyone had expected.

As for Gilder, his full-throttle optimism for technology and the companies developing it hasn't changed one photon. "Yes! The technology revolution is on again," his newsletter's website (gildertech.com) announces. Gilder says his newsletter's stock portfolio has gained 155.8 percent in the p ast three years.

Perhaps Gilder's hedge fund will do as well. But it has a legal problem to resolve before it joins the revolution.