Litigation with big banks has been something of a mixed bag for court-appointed Lehman Brothers liquidation trustee James Giddens. The Hughes Hubbard & Reed partner negotiated an $861 million settlement with JPMorgan Chase in April 2011 over disputed assets that JPMorgan held as one of Lehman’s clearing banks. His counsel at Hughes Hubbard then won a ruling worth $4.8 billion in a battle over Barclays’ acquisition of Lehman’s broker-dealer unit, but in June a judge sided with Barclays’ lawyers at Boies, Schiller & Flexner and overturned the decision.

On Nov. 16 it was Citigroup and Gidden’s turn to announce some good news. In a motion filed in U.S. Bankruptcy Court in Manhattan, the trustee said that Citi had agreed to a $435 million deal to resolve claims that Citi unlawfully seized Lehman deposits as Lehman was imploding in 2008. The proposed settlement requires Citi to pay $360 million to the Lehman estate and to forfeit its claim to a $75 million contingency payment made at the start of the liquidation process. Southern District Bankruptcy Judge James Peck must approve the deal.

Citi is represented by a team from Paul, Weiss, Rifkind, Wharton & Garrison led by Brad Karp. Giddens, who initially sought $1.3 billion from Citi, has special counsel from Menaker & Herrmann. Hughes Hubbard is Giddens’ regular counsel in the Lehman liquidation, but the firm faced a conflict due to its representation of Citigroup on other matters. “The Trustee has determined that protracted litigation over the foregoing matters, with attendant costs and risks, would not be in the best interests of the [Lehman Brothers Inc.] estate,” Giddens stated in his motion for approval of the settlement.

Giddens filed the suit in March 2011, accusing Citibank of refusing to clear Lehman’s foreign exchange trades until Lehman posted a $1 billion deposit. Giddens claimed Citibank then seized the $1 billion and about $300 million in other LBI assets in order to offset its losses once Lehman collapsed.

In a statement, Giddens said: “For the benefit of customers and other creditors, we continue to resolve disputes and marshal assets for the estate, and this agreement accomplishes both.” Karp declined to comment. Judge Peck is scheduled to rule on whether to approve the settlement on Dec. 12.