How two hedge-fund managers fell out - over their hedge in the Hamptons

It is the sort of border dispute one might expect among the Leylandii owners of the suburban middle classes, or which might crop up on the reality TV show Neighbours from Hell. But in the rarefied atmosphere of the Hamptons, the out-of-town summer playground for New York's super-rich? This sort of behaviour just won't do at all.

Earlier this week, the tranquillity of the exclusive getaway was shattered by the sound of earth-moving equipment, followed by police sirens, as two of Wall Street's richest men battled over a path that runs past their neighbouring mansions.

When Marc Spilker ­ a senior executive at the mighty Goldman Sachs, the investment bank known for its aggressive tactics ­ decided the path was too narrow, he ripped down the shrubs that bordered their properties. That enraged Jim Chanos ­ whose $1bn hedge fund is known for its even more aggressive tactics in trying to bring down company share prices ­ who called the police after seeing the shrubs being pulled apart.

Now the two are engaged in a vicious spat that has spilled into the public arena thanks to a furious email by Mr Chanos, not just to Mr Spilker but to a host of senior executives at Goldman Sachs. The email was on the finance industry's gossip-raking blogs before the dust had settled beside the upturned shrubbery.

"My outrage over this arbitrary and unilateral course of action is probably only exceeded by Mr and Mrs Spilker's sense of entitlement that the 4ft-wide path to the beach 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," said Mr Chanos. And he added: " 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!'."

The pair's mansions are on Further Lane, one of the most exclusive addresses in East Hampton, where neighbours include Jann Wenner, the founder of Rolling Stone magazine, and the comedian Jerry Seinfeld. The rest of the villagers are a mixture of celebrity millionaires and New York's "old money" families, long taken to grumbling about how Wall Streeters seem to acquire money and mansions faster than they acquire taste and decorum.

Mr Chanos is the man who first spotted that something was rotten at the energy giant Enron. His multimillion-dollar bets against the company's shares made him a fortune, and made him a legend on Wall Street. Trader Monthly magazine estimates he is one of the highest paid hedge fund bosses in the world, netting between $300m (£150m) and $400m last year.

Marc Spilker, meanwhile, has scrambled up the ranks at Goldman Sachs and was promoted last year to oversee investments in hedge funds and other complex businesses that gamble on the world's financial markets.

Neither man made their millions from backing down and there was no sign of peace breaking out yesterday. Worse, the lawyers are getting involved.

Christopher Kelley, Mr Spilker's attorney, said his client has made " repeated attempts" to discuss his desire to widen the path, but Mr Chanos "has been unwilling to rationally discuss the situation". Mr Chanos is obliged under terms of his deeds to provide a 15ft wide easement to the ocean, Mr Kelley says.

Mr Chanos's lawyers have a 1982 document to back their claim that the path needed to be just four feet wide and say the incident amounts to trespass. "No one should have the right to send bulldozers onto another person's property to forcibly coerce the other side into negotiation without a prior agreement or court order," he said yesterday.