Sky sources reported last week that the Saints were considering legal proceedings as Alderweireld edged closer to Spurs because they believed they had first option to sign the defender.
Belgium international Alderweireld spent last season at Southampton on loan, which contained the option of a permanent transfer. That clause was triggered by Saints, who believed Atletico then had to buy the clause back within a time-frame.
Southampton claimed Atletico did not do so but, according to Reed, it soon became clear Alderweireld preferred a move to Tottenham and there was nothing they could do to stop him.
Reed told Sky Sports News HQ: “There’s nothing to sue Atletico for because we could have had a deal in place, and I have to say Atletico have been exceptionally professional all the way through.
“Whilst the legal representatives from both sides were discussing the pros and cons of a legal argument, I was having very good conversations with them about the potential of making a market price offer and sealing a transfer for Toby.
“But it was the fact that Toby had decided to go to Spurs, regardless of contract salary and everything else, that meant that it was pointless trying to take any more legal action, because our argument was then not with Atletico.”
Alderweireld signed a five-year deal at Tottenham this week and subsequently thanked the staff at Southampton for his time on the south coast.