Guy Hands Drops Lawsuit Against Citigroup in U.S.

The British financier Guy Hands has agreed to end a lawsuit against Citigroup in the United States, though the legal battle may continue in England.

Mr. Hands, who runs the private equity firm Terra Firma Capital Partners, had accused his longtime bankers at Citigroup of defrauding him when Terra Firma bought the music company EMI in 2007, not long before the financial crisis struck.

The lawsuit in this country, which wound through the courts for years and was revived in 2013, is now ending, after the parties agreed to dismiss their remaining claims, according to a filing on Friday in United States District Court in Manhattan.

The agreement is a qualified victory for Citigroup, which recently filed a motion to dismiss the case on the grounds that it wasn’t being heard in the proper forum. Now, if Terra Firma pursues the claims, they will be heard in England, where a jury trial would not be available.

For Terra Firma, a London venue could allow it to consolidate two sets of claims, the newer of which was filed late last year in England.

“Terra Firma and Citigroup have together decided that their disputes should be resolved in one set of proceedings,” Terra Firma and Citigroup said in a joint statement on Friday. “As a result, the parties have consented to the transfer of the claim before the New York court to England, to be consolidated with the proceedings that are ongoing before the English court.”

Citigroup suffered a setback in the case last year, when a federal appeals court vacated a 2011 jury verdict that had cleared the bank of any wrongdoing in the EMI deal. That gave Mr. Hands the opportunity to try again to prove his claim that he was deceived by the bank.

At that point, EMI had already been seized by Citigroup and sold off in pieces, so the dispute became one over money. The case went before Judge Jed S. Rakoff.

Now, the agreement on Friday may change the venue of a case that had sought to shine a spotlight on a questionable aspect of the private equity boom. Citigroup, in addition to advising Terra Firma, also provided billions of dollars in financing for the $6.8 billion takeover.

Mr. Hands, who lost billions of dollars on the investment when the crisis struck, claimed that his banker had tricked him into paying a high price by saying that a rival bidder was in the wings. In reality, the rivals had already dropped out.

Citigroup has said the suit is without merit.