A US jury has ruled that investment bank Citigroup did not trick UK private equity firm Terra Firma into paying an inflated price for music group EMI.
Terra Firma, led by Guy Hands, paid £4.2bn ($6.7bn) for EMI in 2007.
Mr Hands argued Citi led him to believe other parties were interested in EMI, and that the company is worth only three-quarters of what he paid for it.
Terra Firma said it was "disappointed" with the decision and would continue to focus on restructuring EMI with Citi.
Citi provided £2.6bn in loans for the deal, and analysts suggested prior to the case that Terra Firma may be forced to hand ownership over to the US bank if it lost.
Following the New York jury's decision, Terra Firma said it was disappointed the jury found "that we did not prove that we relied on misrepresentations from Citi which caused a loss to our investors.
"We believe this was an important action to bring and that we had a repsonsibility to our investors to bring it".
Key to the outcome of the case were a series of phone calls between former friends Mr Hands and David Wormsley, Citi's main financial adviser on the deal.
Mr Hands had accused of Mr Wormsley of misleading him concerning other bidders for EMI.
While testifying in court last week, Mr Wormsley said he did not remember the calls.
Following the verdict, Citigroup's lawyer Theodore Wells said: "I think Mr Wormsley was put through a terrible ordeal and he was totally innocent... It was a travesty he had to be put through this".