Former Liverpool owners Tom Hicks and George Gillett have dropped their legal action against the Premier League club after agreeing to an out-of-court settlement, ending a bitter dispute that lasted more than two years.

The American businessmen lost control of Liverpool in what they claimed was an "epic swindle" by club directors and a bank in October 2010, when the 18-time English league champions were bought for 300 million pounds (then $476 million) by the parent company of the Boston Red Sox.

Hicks and Gillett said the club was sold at a "substantial undervalue" and claimed the Royal Bank of Scotland and then-Liverpool directors Martin Broughton, Christian Purslow and Ian Ayre "deliberately" blocked attempts to refinance the club's debt.

They pursued legal action but Liverpool said Friday a confidential settlement had been reached.

"All claims and allegations made against Messrs Broughton, Purslow and Ayre have been withdrawn by Messrs Hicks and Gillett and all legal proceedings between the parties concluded," Liverpool said in a statement.

RBS said later Friday that it had also agreed to a settlement with Hicks and Gillett.

"All claims and allegations against RBS arising out of the sale process have been withdrawn [and will not be repeated] by Messrs Hicks and Gillett," RBS said in a statement.

Hicks, a former owner of the Texas Rangers, and Gillett, who used to own the Montreal Canadiens, bought Liverpool in 2007 following a leveraged takeover but were forced to put the club up for sale three years later after struggling to meet repayments.

They opposed the offer from Fenway Sports Group and sought a temporary restraining order in Texas to stop the sale, but it went through.

"I am delighted we can finally close this traumatic chapter in the history of Liverpool FC," said Purslow, who left his role as Liverpool managing director soon after FSG's takeover.