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Sure, offer to burry the hammer (or however that expression works) and put the whole thing behind you. Publicly. In your mind, make a note that this guy is a lose cannon and is likely to turn on you and other people very quickly with little or no warning. Remember that he will go to managment first, upper managment second.
Your manager doesn't want you to be scared of him? Great! Offer to take him to lunch with you and some of your friends at the office. Make friends. Let him know you are a hard worker and you are totally trustworthy. The next time your coworker wants to raise hell and throw around exaggerated accusations, you might just have an ally.
I'm still best friends with my first manager at RadioShack when I was working my way through highschool.
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