Hedge fund billionaire Louis Bacon awarded $203mn in defamation feud

A New York judge has awarded billionaire hedge fund founder Louis Bacon more than $203mn in damages at the end of a bitter defamation case against his former Bahamas neighbour, the Canadian fashion mogul Peter Nygard.

The award, a record for a defamation case in New York state, reflected the overwhelming and “truly stunning” nature of the evidence, wrote Layn Phillips, the former federal judge appointed by the state supreme court as a special referee in the case.

The feud began more than a decade ago with the two men clashing over issues ranging from the loud parties at Nygard’s Robinson Crusoe-themed property in the exclusive Lyford Cay community on Clifton Bay, to whether Bacon had frustrated Nygard’s redevelopment plans after a fire.

The court order said that Nygard had conducted a global smear campaign over almost a decade, falsely asserting that Bacon was a Ku Klux Klan member; that he was guilty of insider trading; that he was implicated in the death of an employee; and that he was implicated in arson.

“Any one of these would have been a significant assault on his character; the combination of all four depicted him as an evildoer of the highest order,” Phillips concluded, describing the campaign as “a deliberate plan by Nygard to personally and professionally destroy Bacon”.

The size of the award, which is subject to appeal, reflects in part the fees racked up over the years-long dispute. As well as $50mn in compensatory damages and $100mn in punitive damages, it includes more than $53mn to cover Bacon’s legal and other mitigation costs to date.

Nygard, the founder of women’s fashion company Nygard International, is in jail in Canada awaiting trial on charges of sexual assault in Toronto and Montreal. He has also been charged in the US with racketeering and sex trafficking. He has previously denied the allegations against him.

His businesses are in bankruptcy, so it is unclear how much of the award Bacon will receive. Nygard spent $15mn to spread what he knew were falsehoods, the court said, which concluded he had been acting “out of hatred, ill-will, spite, and malice”. 

What the court called Nygard’s “all out effort” to destroy Bacon had caused the founder of Moore Capital Management “personal humiliation [and] mental anguish”, it found. His children had been afraid to sleep in their beds and he had cut back on “normal activities that gave him pleasure, such as attending charitable events and visiting his home in the Bahamas, lest he be forced to deal with the lingering allegations”. 

A spokesperson for Bacon said Nygard had paid more than two dozen people to disseminate hundreds of false statements “through every medium imaginable” including YouTube videos, newspapers, pamphlets and demonstrations.

“With this verdict, Mr Bacon is vindicated from the vicious lies and disgusting smear campaign against him, and Mr Nygard has finally been held accountable for at least some of his actions,” the spokesperson said.

A lawyer for Nygard had no immediate comment.