June 14, 2007 -- The headline writes itself: Hedge Fund Managers Fight Over Actual Hedge.
Two millionaire financiers, with adjacent homes on one of the most expensive streets in the United States, are bickering over a row of hedges that line a path down to the beach in the tony town of East Hampton, N.Y.
The 12-yard path separates the 3.7-acre home of Marc Spilker, a Goldman Sachs managing director, from the 3-acre home of James Chanos, founder of the hedge fund Kynikos Associates.
The homes are both on Further Lane, a street that also claims Jerry Seinfeld and Rolling Stone owner Jann Wenner as residents.
Chanos recently called the cops when he saw earth-moving equipment, which he says Spilker ordered, ripping up a pristine row of shrubs Chanos says sits on his property, to widen the 4-foot path by 6 feet.
Enraged, he sent an e-mail to Spilker and his associates at Goldman Sachs.
"My outrage over this arbitrary and unilateral course of action is probably only exceeded by Mr./Mrs. Spilker's sense of entitlement that the 4-foot-wide path to the beach (and specified in the local easement papers) 'was just not wide enough for us' as he said when first broaching the subject of arbitrarily widening a path that was 'in compliance' with the local zoning," Chanos wrote in an e-mail obtained by Portfolio.com.
"I hope this is not a harbinger of how other Goldman senior executives may act when the markets become 'just not lucrative enough for us!'" he continued.
Chanos told ABC News that he knew the media would enjoy a story about two millionaires fighting over a row of hedges and tried to talk Spilker into working out some sort of a deal, or even going to court.
"This is not about ripping down hedges," Chanos told ABC News. "It's about one man feeling he can take the law into his own hands."
Chanos claims that according to a 1982 property deed, the hedges are on his property. But town officials don't seem to see it that way.
"This all goes back to a right of way easement recorded in 1969," said Tom Lawrence, an East Hampton code enforcement officer.
"When you want legal access to the ocean or something else, you need the court to issue an easement. The easement grants rights to specific people for specific things -- utilities, driveways, ocean access -- and is recorded in perpetuity," Lawrence said."As far as I can tell, Spilker had a right to widen the path."
Spilker, who bought his home in 2002 for $7 million, told ABC News, "I'm not going to make any comments."
Chanos spent $2.6 million for his place in 1991.