Clothing Mogul Takes Feud With Hedge Fund Chief to 11th Circuit

MIAMI, Fla. (CN) – Complete with accusations of murder-for-hire, firebombing and sonic torture, the multinational court battle between clothing industry mogul Peter Nygard and his billionaire nemesis Louis Bacon rages on, with a racketeering claim in Florida appellate court.

The bad blood between the two men appears to have begun as a neighborly dispute more than a decade ago in the Bahamas’ Lyford Cay island community, where they shared a property line between their multimillion-dollar beachside mansions.

The tiff clearly snowballed into something vicious.

The legal battle between Nygard — a women’s clothing mogul of Finnish descent — and Bacon — a prominent hedge fund chief — has stretched from New York down to the Bahamas, with the wealthy litigants hurling allegations of defamation and harassment at each other for years on end.

In the latest installment, Nygard is pressing a federal appellate court to reopen his Florida racketeering lawsuit against private investigator and former FBI agent John J. DiPaolo, whom he claims was hired by Bacon to dig up dirt on him.

Nygard says in the lawsuit that the South Florida private investigator was involved in paying off two Bahamian men to make outlandish claims about him. Nygard says he has evidence that Bacon’s agents offered the pair as much as $5 million to smear him.

Among other disturbing statements, the two Bahamian men have purportedly suggested that Nygard enlisted them in a plot to kill Bacon.

According to the court documents, they also asserted that Nygard was behind a retaliatory firebombing of a reverend’s car in the Bahamas. The attack supposedly came after Bacon, the reverend, and a group of environmentalists mounted opposition to Nygard’s dredging around his Lyford Cay mansion.

DiPaolo isn’t backing away from those accusations in the appellate proceedings.

He maintains that the two Bahamians revealed their dealings with Nygard to him when he contacted them as part of his private investigation, which was commissioned by Nygard’s opponents in the dispute over the Lyford Cay dredging.

DiPaolo’s brief describes the two men as “Bahamian gang members” with whom Nygard “conspired” to assail Bacon.

According to DiPaolo, Nygard had these men  “organize mob ‘hate rallies’ to intimidate environmentalists” opposed to Nygard’s dredging.

Complicating matters, both sides are asserting that the Bahamian duo gave them favorable private testimony. While DiPaolo says he has the two on record about the criminal activities, Nygard claims the men recanted their stories to Nygard’s attorneys.

A Florida district court judge last year dismissed the racketeering lawsuit, ruling that Florida was not the right forum for the case, and that the Bahamas would be an appropriate place to pursue it.

The judge found that the lawsuit echoed Nygard’s conspiracy allegations in already-ongoing litigation in the Bahamas.

“Allowing this case to proceed alongside the Bahamas Action would run the risk of inconsistent results,”  the judge wrote.

On Wednesday in the 11th Circuit, Nygard’s attorney Benjamine Reid argued for the racketeering case to be revived.

According to Reid, the district court judge erred in refusing to apply a legal “deference owed to a plaintiff’s forum choice.”

“[The scheme] operated in the United States principally,” he said during oral arguments Wednesday.

“The damage occurred entirely in the United States.”

Reid described the racketeering lawsuit as a “narrow RICO” case, prompting one of the appellate panel members to ask, “Isn’t that an oxymoron?”

The case is on appeal from the Southern District of Florida.

DiPaolo’s attorney Jeffrey Crockett countered during oral arguments Wednesday that the district court’s dismissal was fair, and that the judge thoroughly weighed the costs and benefits of letting the spat play out down in the Bahamian courts.

His brief points to a line in the judge’s ruling, where the judge notes that many of the key witnesses “are located in the Bahamas, or alternatively are individuals within Plaintiffs’ or Defendants’ control whose appearance could be compelled in the Bahamas.”

Right after Reid wrapped up his initial colloquy, Crockett stood up to tell the 11th Circuit panel, “Everything you just heard is dead wrong.”

If it still matters to anyone what spawned the blossoming rancor, a 2016 Vanity Fair piece details the events that reportedly led Nygard and Bacon to turn against each other in the Bahamas after living cordially alongside each other for many years.

One thread in the dispute involved Bacon’s becoming fed up with noise and excessive traffic from Nygard’s parties, Vanity Fair reported. Bacon reportedly struck back at one point by installing high-powered speakers aimed at Nygard’s property, which blared grating sound waves.

“It was supposed to create white noise on my side, but that didn’t work,” Bacon is quoted as saying. “What it did to his side, I wasn’t really interested in.”

Bacon earned an incremental victory in the men’s labyrinthine court battle last April, when a New York court resurrected his multimillion-dollar defamation lawsuit against Nygard (separate from the case at hand).

That lawsuit says Nygard spread false information that Bacon was racist and has ties to the KKK, among other smear-campaign fodder.

Nygard denies as much.

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