UPDATE 1-U.S. billionaire targets Canadian designer in Bahamas row

Wed Aug 13, 2014 9:28pm EDT

(Adds comment from Peter Nygård's lawyer in paragraph 5)

By Jonathan Stempel

NEW YORK Aug 13 (Reuters) - A billionaire hedge fund manager who has sued to stop Canadian fashion designer Peter Nygård from expanding his Bahamas estate has asked a U.S. court to help him obtain crucial evidence from a whistleblower to help with the litigation.

The unusual request by Louis Bacon, founder of Moore Capital Management LP, expands the conflict that the 71-year-old Nygård already faces in the Bahamas.

Environmental groups and many residents there have contended that his property development in the exclusive gated Lyford Cay community on the west side of New Providence Island may damage the surrounding ecosystem and beaches.

Bacon outlined his request in filings on Wednesday with the U.S. District Court in Manhattan.

Richard Good, a lawyer for Nygård, called the request part of Bacon's "malicious campaign" to illegally obtain the Bahamian property and "wrongfully continue to damage Mr. Nygård's businesses and reputation." Nygård will hire a New York lawyer "with a view" to filing a countersuit in the now 10-year battle, Good added.

Nygård, a son of Finnish immigrants, is chairman of Nygård International, which is based in Winnipeg, Manitoba.

Bacon, who said he lives next door to Nygård in the Bahamas, wants to obtain more than 1,000 hours of footage from Stephen Feralio, 28, a former personal videographer for Nygård.

According to the filings, Feralio approached Bacon in March with video evidence of his former boss's activities, but feared turning over the footage because Nygård might retaliate.

In a court filing, Feralio said this concern was based in part on published reports about Nygård by the Canadian Broadcasting Corp and Forbes magazine.

"I am willing to come forward and to turn over the video evidence in my possession because it is the right thing to do," Feralio said.

Bacon said he has also been a target of a "smear campaign" by Nygård, including false accusations linking him to insider trading, drug trafficking and murder, since Bahamian officials in 2010 directed the designer to curb his expansion plan.

The environmental group Save the Bays has also been targeting Nygård in the Bahamas, and according to its website and published reports, it has drawn support from the actor Sir Sean Connery, who has property there.

Bacon is a director of Save the Bays, whose board includes Robert F. Kennedy Jr, a son of the former U.S. attorney general and New York senator.

To obtain the footage, which Bacon said he hopes to use in pending environmental and defamation lawsuits in the Bahamas, Bacon invoked a little-known U.S. law designed to help litigants obtain evidence for use in foreign litigation.

Bacon's law firm Gibson, Dunn & Crutcher used that law to convince a Manhattan federal judge in March that Steven Donziger, a lawyer for Ecuadorean citizens accusing Chevron Corp of causing damage to the rain forest, employed bribery and fraud to win a $9.5 billion damages award in Ecuador.

Donziger has denied wrongdoing. He is appealing.

Orin Snyder, a lawyer for Bacon, declined to comment.

Bacon founded New York-based Moore Capital in 1989. He is now worth $1.6 billion, according to Forbes.

The case is In re: Application of the Coalition to Protect Clifton Bay and Louis Bacon, U.S. District Court, Southern District of New York, No. 14-mc-00258. (Reporting by Jonathan Stempel in New York; Additional reporting by Joseph Ax; Editing by Tom Brown and Jan Paschal)