Warner/New Line and Tolkien Trust Settle

Sources: The Hollywood Reporter, Deadline Hollywood Daily

Just over a year and a half after suing New Line (and, ultimately, new owner Warner Bros.) over unpaid profits from the Lord of the Rings film series, publisher Harper-Collins and the Tolkien Trust, led by author J.R.R. Tolkien's son Christopher, have reached a settlement with the studio, allowing The Hobbit, a two-part prequel, to proceed. The terms of the settlement were not released.

Christopher Tolkien said of the decision: "The Trustees regret that legal action was necessary, but are glad that this dispute has been settled on satisfactory terms that will allow the Tolkien Trust properly to pursue its charitable objectives. The Trustees acknowledge that New Line may now proceed with its proposed films of The Hobbit." Producer Peter Jackson, who helmed the New Line films, and director Guillermo del Toro, who is slated to direct both halves of The Hobbit, have been quietly guarded about any solid plans for the film, given the lawsuit.

Jackson filed a lawsuit of his own in 2005, seeking an audit of accounting practices during the first Lord of the Rings film, The Fellowship of the Ring. He settled with New Line in 2007 before signing on to produce Hobbit.

The Hobbit is tentatively slated for release in 2011. No actors have officially signed onto the project.