The whole thing began over a puddle in a driveway.

The two men are next-door neighbors in Lyford Cay, a gated community on New Providence, an island in the Bahamas, and for years it had been a peaceful adjacency. Because both of them happen to be billionaires, it is a picturesque driveway, lined by casuarina trees and triple Alexander palms, 200 feet north of a stunning body of water known as Clifton Bay and 100 feet south of an even more stunning vista upon the Atlantic Ocean.

It is less a driveway than a road—but also a portion of road that is shared by both neighbors and nobody else, owing to how it cuts right through one man’s property and ends at the other man’s, which occupies the westernmost tip of the island. And we’re talking about a land of eight-figure beachfront properties, where the houses are very close to each other—where one man’s dining room is only about 200 feet from the other’s revolving acrylic discotheque floor and the glass walls that enclose it with a steady cascade of water.

An “easement” is what the driveway’s creator, the developer E. P. Taylor, a Canadian brewing tycoon, termed this shared passage when he established Lyford Cay in 1955. (The road itself he saw fit to name E. P. Taylor Drive.) But just as one man’s driveway is another man’s easement, one neighbor’s cocktail party is another’s sleepless night due to the fact that there are 2,000 Bahamians—plus a lot of young women from islands throughout the Atlantic, not to mention Europe—whooping it up at the topless bacchanal next door. And one man’s overflow of parked cars along the driveway on that sleepless neighbor’s side of the property line is another man’s reason to have the section of the driveway that cuts through his property re-graded and rebuilt, adding a dip and tall flagstone walls on either side, leaving no shoulder space for anybody to ever conceivably think of parking there, while also screening the driveway from view.

The dip created a drainage problem when it rained: the puddling. “It was smelly. And it had mosquitoes. And in order to come to our place you had to go and wear rubber boots to come and knock on our door,” says Peter Nygard, a Canadian manufacturer of women’s wear and the neighbor at the end of the road who threw the parties. In a court filing, he referred to it as “a toilet drain.”

“Nygard likes the idea that people think they’re going to a separate island when they go to his place,” says Louis Bacon, a titan of New York finance and the neighbor who constructed the strategic no-parking zone. “Now it kind of looks like what the English call a ha-ha: the road drops and it feels more private. It’s a better entrance for his guests and better for me too.”

But that was then, and this is now. And somehow, what began in 2007 with a bit of irritation over runoff has escalated to a battle royal encompassing no fewer than 16 legal actions between Nygard and Bacon and their associates, in which both sides are claiming damages in the tens of millions of dollars and lobbing allegations of activities that include vandalism, bribery, insider trading, arson, murder, destruction of the fragile seabed, and having a close association with the Ku Klux Klan.

It has reached a point where neither man, though each used to consider Lyford Cay his rightful home, spends much time there anymore. Nygard, unable to obtain government permits to rebuild his six-acre, Mayan-inspired compound after an electrical fire in 2009 demolished most of the structures—including the 32,000-square-foot “grand hall,” with its 100,000-pound glass ceiling—has been left to live out of his study when he does visit, and has stopped throwing parties altogether. He blames the man next door for all of it, citing a string of environmental-degradation suits that Bacon has filed against him in court.

SueLyn Medeiros and Nygard at Bahamas Fashion Week, in Nassau, 2008. © Wenn Ltd./Alamy

Bacon hasn’t set foot in the Bahamas in more than a year, claiming it would put his personal safety at risk. In January 2015, he leveled a $100 million defamation complaint against Nygard in New York, where both men’s businesses are headquartered. Nygard, the suit alleges, has been the “ringleader” behind a vast multi-media smear campaign—TV and radio ads purchased, Web sites created, videos doctored, T-shirts printed, and even “hate rallies” staged with parades through Nassau—all in the name of labeling Bacon a racist, a thief, and a “terrorist,” and bearing messages such as BACON GO HOME.