Hedge fund billionaire files $50 MILLION defamation suit against Bahamas neighbor following murder, drugs and racism claims

• Tycoons Louis Bacon and Peter Nygard engaged in a decade-long feud
• It has involved allegations of arson, racism, drug trafficking and murder
• Now, Bacon has filed a huge $50million defamation suit against Nygard
• Claims billionaire has waged an 'obsessive' smear campaign for years
• Pair live next to each other on an exclusive beach strip in the Bahamas

By Sophie Jane Evans For Dailymail.com

Published: 18:50 EST, 24 January 2015 | Updated: 18:52 EST, 24 January 2015

He has been accused of arson, racism, drug trafficking and even murder.

Now, New York hedge fund manager Louis Bacon, 61, has filed a whopping $50million defamation suit against Canadian clothing tycoon and fellow billionaire, Peter Nygard, 71.

In the suit, Bacon claims Nygard - who lives next to him on an exclusive beach strip in the Clifton Bay area of the Bahamas - has waged an 'obsessive and malicious' smear campaign for years.

The campaign has seen him wrongly accused of covering up a series of murders and carrying out a high-level conspiracy to 'unseat the ruling political party in the Bahamas', Bacon writes.

Billionaires' brawl: New York hedge-fund manager Louis Bacon (left), 61, has filed a whopping $50million defamation suit against 71-year-old Canadian clothing tycoon and fellow billionaire, Peter Nygard (right)

Home: In the suit, Bacon claims Nygard - who lives next to him on an exclusive beach strip (pictured) in the Clifton Bay area of the Bahamas - has waged an 'obsessive and malicious' smear campaign for years

It has also seen rumors spread about him being a white supremacist and a member of the Ku Klux Klan (KKK), possessing terrorist weaponry and committing arson at Nygard's home, he says.   

In a statement, Bacon’s attorney, Orin Snyder, said the suit - which alleges that Nygard carried out the campaign both online and in local newspapers - had been unsealed in New York on Thursday.

'Louis Bacon filed this lawsuit to hold Peter Nygard and his companies responsible for their unlawful and reprehensible smear campaign,' he said, adding: 'We look forward to our day in court.' 

In the suit, Bacon himself claims that Nygard 'harbors spite, ill will, and animus' toward him and that his 'sinister' allegations have destroyed Bacon's professional, philanthropic and personal reputations'.

Nygard's representatives have strongly denied the suit's claims.

'The allegations in Louis Bacon's latest lawsuit are completely without merit and will be proven so if they ever get to trial,' the representatives told the Business Insider.

'The assertion that Mr. Bacon has been defamed is not supportable.'

In relation to the corruption claims, they added: 'Mr. Bacon has falsely and maliciously accused Mr. Nygard and [Bahamas] Prime Minister Perry Christie of government corruption.

'In fact, Mr. Bacon has falsified evidence of corruption.'

The lawsuit is part of a decade-long battle between the two billionaires that started as a property-line dispute. The pair live on adjoining estates in the exclusive Lyford Cay community.

Nygard, a self-styled playboy and eccentric owner of Nygard International, has an estimated fortune just shy of $1billion, and has resided on the island since 1987.

His famous 150,000-square-foot beachfront mansion, dubbed 'Nygard Cay', has previously featured on 'The Oprah Winfrey Show' and 'Lifestyles of the Rich and Famous'.

Meanwhile, visitors have included former U.S. President George Bush and actor Robert De Niro.

Burned: The campaign has seen rumors spread about Bacon being a white supremacist and a KKK member, possessing terrorist weaponry and setting fire to Nygard's Mayan-themed home (pictured), the suit states

Couple: In a statement, Bacon’s attorney, Orin Snyder, said the suit against Nygard had been unsealed in New York on Thursday. Above, Bacon, worth around $1.6bn, is seen with his wife Gabrielle at a formal event

Bacon, meanwhile, is the founder of Moore Capital Management LLC, has an estimated wealth of $1.6billion. He has lived next door to Nygard since 1996.

The feud began around 2004 when a group of conservationists, including Bacon, established the Coalition to Protect Clifton Bay to preserve the Western part of the island, where Nygard lives.

The group accused Nygard of illegally dredging the sea bed, extending the island's natural shore line, and of expanding the borders of his compound without proper permission.

They attempted to block any further attempts by the billionaire to expand his home buy buying up a large stretch of coast line and establishing a nature reserve.

Nygard hit back with a series of videos in which he claimed to be a friend of the Bahamas and passionate about conservation. Since then, Bacon and Nygard have been waged in war.

In his lawsuit, Bacon accuses Nygard of doctoring a television report about the arrest of Wall Street mogul Rajat Gupta for inside trading. The report aired on CBS News in October 2011.

In it, Nygard deliberately superimposed Bacon's face over Gupta's, wrongly alleging that the billionaire was at the center of a 'billion-dollar scam', the suit claims, according to the New York Post.

During the alleged smear campaign, Nygard also claimed Bacon was trying to hide the fact that his great-grandfather, Col. Roger B. Moore, was a member of the KKK, it says.

Eccentric: Mr Nygard (pictured, center, with women at Beverly Hills Hotel), who has seven children by four women, built his impressive 150,000-square-foot beachfront mansion, dubbed 'Nygard Cay', in 1987

Mogul: In the suit, Bacon himself claims that Nygard (pictured left) 'harbors spite, ill will, and animus' toward him and that his allegations have destroyed Bacon's professional, philanthropic and personal reputations'

Bacon claims this amounts to character assassination, and says Nygard is behind rallies and protest marches on the island which have seen him denounced as a racist.

And elsewhere in the suit, Bacon claims his neighbor spread rumors that he had covered up the murder of his house manager, Dan Tuckfield, who died in his pool in May 2010.  

The bitter argument came to a dramatic head in 2009 when a fire gutted Nygard's mansion.

Fire crews listed the official cause as 'unknown', but Nygard claimed it was an act of arson organised by Bacon - an allegation he strongly denies.

Visitors: Mr Nygard's home was previously featured on 'The Oprah Winfrey Show' and 'Lifestyles of the Rich and Famous', with visitors including ex-President George Bush (left) and actor Robert De Niro (right)

Nygard also alleged that Bacon installed four 'large, military-grade' speakers at the boundary between their two properties, before aiming them at his bedroom.

Bacon then blared 'ear piercing noises' toward Nygard, with one of Bacon's assistants shouting 'There, that's a message from Mr. Bacon. Don't f*** with Louis,' according to court papers.

Since the fire destroyed large parts of his home, Nygard has applied for planning permission to rebuild the lavish estate in even grander style, prompting outrage from the exclusive community.

Last year, more than 100 people, including actor Sean Connery, filed a legal complaint against the government over efforts by Mr Nygard to redevelop his compound.

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