“We were rooting for Carl because we were effectively partners,” Mr. Ackman says. “And then” — expletives follow.
In 2004, Hallwood merged with another company, for $137 a share, netting Mr. Icahn a tidy profit. After waiting a few days, Mr. Ackman called to compliment him and to ask about his share.
As Mr. Ackman tells it, the older man scoffed: “First off, I didn’t sell,” Mr. Icahn told him. Mr. Icahn argued that a merger did not constitute a sale of shares.
“Well, do you still own the shares?” Mr. Ackman asked.
“No,” Mr. Icahn said. “But I didn’t sell.”
And so it went. Mr. Ackman threatened to sue. Mr. Icahn roared that he would countersue.
“Go ahead, sue me. You know what, I’m going to sue you!” Mr. Icahn shouted, according to Mr. Ackman, who says Mr. Icahn told him that he took his advice on MBIA and lost $20 million.
Mr. Icahn says that he never threatened to sue Mr. Ackman and that he held onto his bet against MBIA long enough to make money. Mr. Ackman sued in 2004, contending breach of contract.
As years rolled by, the dispute became a running joke on Wall Street. Mr. Ackman went on to open a new firm, Pershing Square Capital Management, and became an investing celebrity. He took positions in the likes of Sears, McDonald’s and, more recently, J. C. Penney. He made $1.5 billion on a bet on General Growth Properties.
Mr. Ackman’s offices in Midtown Manhattan are white marble and white leather, punctuated with odd pieces like the pilot’s ejector seat from a nuclear bomber from the 1950s. Had Mr. Icahn paid him from the start, he says, he would have shared his winning ideas. Instead, he joined with firms like Vornado Realty Trust, the big real estate company run by Steven Roth. Mr. Roth, he says, has made reams of money from the relationship.
While Mr. Ackman has moved on, Mr. Icahn, in many ways, seems frozen in time. His offices are filled with mahogany and classical paintings and sculptures. He still keeps odd hours, sleeping in and then working late. His voice is still Far Rockaway growl. He uses it to bark at corporate directors, competitors and, periodically, Mr. Ackman.
“Maybe I can be a tough guy, but I’ve been in business since 1960 and made money every year except 2008,” Mr. Icahn says. “I have never ever been in a lawsuit with anybody who trusted me with money or in a lawsuit with any employee.”
Over the last seven years, Mr. Icahn and Mr. Ackman have interacted only a few times. Mostly, it is their lawyers who have suffered the endless rounds of motions, hearings and appeals. (Mr. Ackman hired Andrew J. Levander, the criminal defense lawyer who was recently hired by Jon S. Corzine, the former governor of New Jersey, who presided over the recent collapse of the brokerage firm MF Global.)
Mr. Ackman and Mr. Icahn agree about one interaction. It was a few years ago — they disagree about the exact date — at Il Tinello, a restaurant on West 56th Street that Mr. Icahn likes.
After a lengthy, boozy dinner, Mr. Icahn made an offer: he would put $10 million in one of Mr. Ackman’s favorite charities to settle the dispute once and for all. Mr. Ackman refused, saying the money belonged to Gotham investors. The men left amicably. Mr. Ackman says he paid the bill.
Then, in late 2010, the lawsuit resurfaced as a point of conflict. Mr. Ackman received a call from a friend, David Tisch, the New York investor, wanting to know about his experience with Mr. Icahn. Mr. Tisch told him that Mr. Icahn was looking to invest about $100 million in Mr. Tisch’s new fund, Mr. Ackman says. (Through a spokesperson, Mr. Tisch says he never turned down a formal offer from Mr. Icahn and would welcome any investment in the future. Mr. Icahn says he does not recall anyone by the name of David Tisch.)
So Mr. Ackman says he told his friend what had transpired. Mr. Tisch refused Mr. Icahn’s money.
Mr. Icahn, says Mr. Ackman, called in a huff.
“Bill, you’re blaspheming me,” Mr. Icahn complained, according to Mr. Ackman.
Mr. Icahn says he does not recall any such conversation. He also notes that he is asked almost daily by hedge fund managers to make investments, so that losing out on one opportunity means little to him.
And that was it, until last month, after Mr. Icahn’s final appeal was denied. Mr. Ackman received nearly $9 million from Mr. Icahn, almost double the original amount, thanks to the accrued interest.
On the day of the transfer, Mr. Icahn called the younger man and left a message. Mr. Ackman returned the call. He never heard back.
At least until Nov. 17, when, after an inquiry from The New York Times, Mr. Icahn finally called — and let Mr. Ackman have it once again.
“He started to lecture me,” Mr. Icahn says of Mr. Ackman. “And I said, ‘I’ve been in this business for 50 years, and I’ve done O.K. without your advice.’ ”