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Peter Nygard's property in the Bahamas, ‘Nygard Cay.’

Billionaire fund manager Louis Bacon lost another battle in his decade-long feud with Canadian clothing magnate Peter Nygard over their neighbouring properties in the Bahamas as a New York judge threw out Mr. Bacon's defamation lawsuit claiming he was forced to flee the island country.

After an appeals court last month upheld the dismissal of claims over most of 135 statements Mr. Bacon said were part of Mr. Nygard's harassment campaign, state court Justice Cynthia Kern on Wednesday threw out the rest, saying the case should be heard in the Bahamas because the dispute arose from their relationship as neighbours.

Mr. Bacon sued Mr. Nygard in January, 2015, as part of a long-standing dispute over plans to expand his property on the exclusive Lyford Cay, claiming the clothing magnate staged rallies targeting him and had employees vandalize his property.

Mr. Nygard countersued, accusing Mr. Bacon of pursuing a vendetta.

"In describing the actions that constitute the smear campaign," Justice Kern said, "it is clear that the allegations almost entirely involve activities which took place in the Bahamas."

The ruling was strictly procedural, Patrick Scanlan, a spokesman for Mr. Bacon, said in an e-mail.

"While Mr. Bacon disagrees with this decision, and is considering his appellate options, it should be noted that nothing in the court's decision purports to exonerate Mr. Nygard for his malicious conduct." Mr. Scanlan said.

Mr. Bacon is committed to proving his claims in whichever court is appropriate," Scanlan said.

Justice Kern noted that Mr. Bacon started nine separate legal actions in the Bahamas since 2011 related to the dispute. She dismissed the case on the condition that the defendants agree to the jurisdiction of that court system.

The men have fought in courts from London to Los Angeles over matters including Mr. Nygard's plans to expand his property and Mr. Bacon's use of large speakers to drown out noise from Mr. Nygard's parties. Mr. Nygard in December bought full-page ads in two Bahamian newspapers calling for an end to the feud.

A New York appeals court last month upheld Justice Kern's ruling dismissing most of 135 statements that Mr. Bacon said were part of the harassment campaign because he had taken too long to file them.

"This was a frivolous lawsuit brought by Mr. Bacon in an effort to further his campaign of harassing Mr. Nygard in the international media," Aaron Marks, an attorney for Nygard, said in a statement. "Justice Kern correctly found such an action has no place in a New York courthouse."

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