Tiffany Mitchell, 28, claimed the 'Mean Girls' star punched her during an alleged brawl at the Club Avenue venue in Manhattan last November, but a third-degree misdemeanour assault charge has now been dismissed, reported TMZ.
Prosecutors' case against Lohan reportedly crumbled due to a lack of co-operation from witnesses, but Mitchell's lawyer, Gloria Allred, insists her client won't give up her fight for justice.
"Tiffany is very disappointed... (She) is considering all of her legal options in the civil justice system because of what she suffered that night," Allred said. However, Lohan's attorney, Mark Heller, insists the embattled star can finally put the legal mess behind her.
"This was the final legal hurdle to overcome and clear the path of Lindsay's freedom. An alleged gypsy fortune teller tried to grasp her 15 minutes of fame by claiming that Lindsay Lohan assaulted her," he said.
News of the case dismissal came just days after the troubled actress pleaded no contest to a number of charges relating to a car accident in California last year.
Lohan agreed to serve 90 days in rehab, 30 days of community service and 18 months of psychotherapy to avoid a stint behind bars. She has time till May 2 to begin the residential treatment program. Lohan plans to shoot a guest appearance on Charlie Sheen's TV series 'Anger Management' before she checks in.