Jonathan Wiggs/Globe Staff
The former business partners behind a winter festival on City Hall Plaza settled their legal battle out of court late Thursday just as the dispute appeared to be headed for a protracted fight.
The settlement was announced just hours after the Globe published a story on its website detailing a countersuit brought by the fired managers of the holiday market at Boston Winter.
The spurned market organizer, Boston Winter Village Inc., had been sued a month earlier by Boston Garden Development Corp., the company hired by the city in 2016 to run the event, which features vendors, concessions, and a skating rink.
“We have reached an understanding to resolve our disputes, which did not require Boston Garden Development Corp. to make any payments,” said Tricia McCorkle, spokeswoman for the company. She declined to disclose terms of the agreement.
A representative for Boston Winter Village said the company planned to withdraw its countersuit and declined to comment further.
On Wednesday, the company filed court papers demanding $19.4 million in unpaid revenues and damages from Boston Garden Development, alleging the organization pursued the festival as a “quid pro quo for permits and other benefits” for the Hub on Causeway project.
Boston Garden Development is a subsidiary of Delaware North, the owner and operator of TD Garden and the developer behind Hub on Causeway.
The legal filing didn’t offer evidence supporting the allegation, but Boston Winter Village said the city issued permits for the project at the same time Boston Garden Development was picked to run the Government Center event.
Earlier Thursday, McCorkle said the allegations were “defamatory and slanderous.” The city’s planning agency approved the Hub on Causeway project three years before Boston Garden Development was awarded the contract for the event, she said.
A spokeswoman for Mayor Martin J. Walsh didn’t respond Thursday night to a request for comment about the settlement. In an earlier statement, Walsh’s spokeswoman, Nicole Caravella, said Boston Garden Development has been fulfilling its promises to the city.
Last month, Boston Garden Development terminated its three-year contract with Boston Winter Village and its affiliate, Millennial Exhibitions.
It also sued the company, alleging it was still owed $235,000 from the first year of the agreement in 2016, after paying hundreds of thousands of dollars in advance payments.
“We sincerely regret hiring [Millennial Exhibitions] as our subcontractor, as over time it became quite clear that the company was unable to deliver a market to the standards that the city of Boston deserves,” Amy Latimer, president of Boston Garden Development, wrote last month in a letter to the city.
The company said it had managed a holiday market in Canada, but Boston Garden Development later learned “those claims were significantly exaggerated,” Latimer wrote.
On Tuesday, a judge granted a request by Boston Garden Development to freeze about $174,000 held in a bank account tied to Boston Winter Village’s principals, Lena Romanova and Johan Rizki, court records show.
Boston Winter Village alleged it was owed $12.1 million from the Boston Winter venture and another $7.3 million from a market it planned to conduct in Copley Square. The city vetoed the Copley Square event, court papers said, after Delaware North accused Boston Winter Village of not paying suppliers.
A mayoral spokeswoman declined to comment on that allegation, citing the litigation.
Boston Winter Village ran the market and shopping booths on the plaza since the event began in 2016. After being fired, it launched a website accusing Boston Garden Development of breaching its contract, blocking Boston Winter Village’s efforts to get city permits for the event, and mismanaging the festival.
In its counterclaim, Boston Winter Village said the shopping booths and vendors suffered because Boston Garden Development limited the electrical supply on the plaza, leaving merchants to rely on “one small heater” during freezing weather in December and forcing the closure of a warming tent for children because of lack of heat.
The skating loop operated by Boston Garden Development, court papers alleged, obstructed space designated for vendors and foot traffic dropped from 2016 levels. Boston Winter Village said Boston Garden Development inflated attendance figures, saying the company’s estimate that more than 500,000 people went to the event was about three times Winter Village’s calculations.
“The event was a financial bust for Boston Winter Village along with many, if not all, of the small vendors who signed on,” the counterclaim said.
Boston Winter Village also alleged it was bullied by a Delaware North representative, who bragged about the company’s clout with the city, disparaged the company’s principals as foreigners, and threatened them with litigation.
Boston Winter Village said it complained to the city about Boston Garden Development, but its petitions “fell on deaf ears.”
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