(Updates with Nygard’s lawyer in 12th paragraph.)
Aug. 14 (Bloomberg) -- Louis Bacon has had enough of looking only to Bahamian courts for satisfaction in a star- studded, not-in-my-backyard-battle with a Canadian clothing magnate. Now he’s come to New York.
The hedge fund founder asked a Manhattan court to grant him access to recordings he claims will prove his Bahamas neighbor, Canadian clothing maker Peter Nygard, ran a “smear campaign” with faked videos portraying him as an insider trader, drug trafficker, Ku Klux Klan member and murderer.
Bacon, the chairman and chief executive officer of Moore Capital Management LLC, wants more than a thousand hours of footage he alleges was shot by a videographer formerly employed by Nygard, founder of Nygard International Partnership, a Winnipeg, Manitoba-based company that designs and sells women’s clothes. Bacon claimed Nygard is retaliating against him for complaining about alleged environmental damage caused by the expansion of the Canadian executive’s Bahamas property.
“The smear campaign is intended to disparage, intimidate, and ultimately drive Mr. Bacon away from the Bahamas,” Bacon claimed yesterday in a 31-page filing in Manhattan federal court.
The litigation’s arrival in Manhattan escalates a battle between the owners of adjacent properties in Lyford Cay, an exclusive community on the western tip of New Providence Island. Bacon is citing a little-used U.S. law to gain control of the recordings, made from 2011 to early this year, for use in foreign litigation.
Bacon said he plans to use them as evidence in five defamation and two environmental lawsuits pending in Bahamian courts. His lawyers, from the New York office of Gibson, Dunn & Crutcher LLP, successfully used the law in an effort to persuade a Manhattan federal judge this year that Steven Donziger, a New York lawyer representing Ecuadorean citizens, used bribery and fraud to win a $9.5 billion environmental-damage award against Chevron Corp.
Bacon founded New York-based Moore Capital in 1989. The firm has $14.9 billion in assets under management and employs more than 400 people.
The dispute apparently stems from Bacon’s allegations that Nygard caused ecological damage by illegally expanding his estate and commercializing its beachfront. Bacon alleged in court papers that Nygard began a campaign in 2010 to discredit him for opposing what Bacon calls an “unlawful land grab.”
Bacon, who was awarded the Audubon Medal in 2013 for his environmental advocacy and philanthropy, was a founder of the local group called “The Coalition to Protect Clifton Bay,” or “Save the Bays,” according to his filing in Manhattan. The group has filed lawsuits in the Bahamas related to claims the government has failed to enforce Bahamian law by blocking Nygard, according to the court filing.
Bacon said in the New York court papers that the Bahamas cases are pending. The Bahamas litigation, or the parties to the cases, couldn’t be immediately confirmed.
Bacon claimed Nygard has almost doubled his property, from 3.25 acres in 1984 to 6.1 acres in 2012, by illegally dredging the nearby sea bed and constructing ocean walls to limit water flow and increase beachfront.
Richard Good, a Winnipeg lawyer for Nygard, said today in a statement that Bacon’s filing is part of a “10-year battle” that has touched on Nygard’s 2010 applications to the Bahamian government for permits tied to reconstruction of his home.
Good said Nygard will hire lawyers in New York to fight the U.S. litigation. In July, the clothing executive rejected environmental claims over his property by a group of celebrity landowners, including actor Sean Connery and Robert F. Kennedy Jr., as well as Bacon’s Save the Bays, according to the CBC.
“Since formally filing for the permits, Mr. Nygard has fully cooperated with government officials during a long wait period of four years,” Good said in the statement. “The required environmental assessments have been completed and are in the hands of the government. These assessments confirm that there has never been any adverse environmental impact caused by Nygard’s activities. Mr. Nygard simply wants to re-build and restore his home following a devastating fire in 2009 that left 70% of his home in ruins.”
Nygard’s estate, “Nygard Cay,” features a five-acre “Robinson Crusoe playground” with replicas of Mayan Temples, a private tennis court, beaches, pool, aquarium, disco club and state-of-the-art home theater, according to Nygard’s website.
Bacon claimed Nygard orchestrated efforts to defame him in the press and on the Internet, including false ghost-written newspaper articles and online videos. In July, dozens of protesters allegedly paid by Nygard, carrying signs linking Bacon to the Ku Klux Klan, marched through the streets of Nassau, Bahamas, Bacon claimed in the court filing.
According to Bacon, Nygard used his private jet to fly Nation of Islam leader Louis Farrakhan to the Bahamas, where he spoke at a rally denouncing Bacon as a racist.
Earlier this year, Bacon alleged, his office was contacted by Stephen Feralio, a 28-year-old videographer who said he was hired in May 2011 by Nygard. Bacon said Feralio was retained to create and edit video footage of Nygard in New York, the Bahamas and other locations around the world.
According to Bacon’s court filing, Feralio claimed Nygard also required him to create Internet videos attacking the hedge fund manager. Feralio said he uploaded 16 false attack videos to YouTube in 2013, using the pseudonym “Paul Pierce,” according to the court filing.
Feralio, who Bacon said is a U.S. citizen, is reluctant to turn over the videos without a court order because he fears retaliation, according to the filing. The recordings are locked in a safe in New York, the hedge fund founder said in court papers.
Feralio, who Bacon said has moved to an unspecified location, couldn’t be immediately reached for comment.
One video Bacon attributes to Nygard is titled, “Is Louis Bacon Racist?” The video, posted on YouTube, portrays Bacon as having been implicated in “one of the biggest Wall Street insider cases ever.” In reality, Bacon said in yesterday’s court filing, his picture was edited into a 2011 news report about the insider trading arrest of former Goldman Sachs Group Inc. Director Rajat Gupta. The video also edited Bacon’s image into an ABC News report titled “The New KKK.”
Another video Bacon attributes to Nygard in his court filing is titled “Is Louis Bacon a Murderer?” suggesting he was behind several killings on his property. Bacon also claimed in court papers that a Nygard press secretary authored articles falsely accusing him of running an international drug trafficking ring.
“A concerned U.S. whistleblower has now come forward with smoking-gun evidence,” said Orin Snyder, a partner with Gibson Dunn who represents Bacon. “Our clients are seeking the assistance of the U.S. courts to obtain this evidence, which will greatly aid their prosecution of important lawsuits against Nygard and others in the Bahamas.”
The case is In Re Application of The Coalition to Protect Clifton Bay and Louis Bacon, 14-MC-00258, U.S. District Court, Southern District of New York (Manhattan).