New York judge Jed Rakoff ruled on Tuesday that the court will hear just two allegations, one of fraudulent misrepresentation and one of fraudulent concealment, after rejecting two of Terra's arguments against the bank, alleging negligent misrepresentation and tortuous interference.

A spokesman for Terra Firma said the company was pleased with Rakoff's ruling.

Terra alleges in its lawsuit that Citigroup inflated the price of EMI Group Plc by not revealing that the only other remaining bidder had withdrawn from the ...