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'Lord of the Rings' Lawsuit Settled For Over $100 Million

New Line Cinema and the Tolkien estate have settled their lawsuit over profits from the 'Lord of the Rings' trilogy released between 2001 and 2003.

The heirs of J.R.R. Tolkien had sued the studio for at least $150 million in damages after it failed to pay the promised 7.5% of gross receipts.

The estate claimed that it only received an upfront payment of $62,500 and hadn't seen even 'one penny' from the movies which earned an estimated $6 billion with movie tickets, DVDs and merchandise sales worldwide.

New Line claimed a number of suspicious expenses, including 'advertisement' payments to AOL (which is part of the same Time Warner group of companies) to say that the films didn't make a profit but Tolkien's estate wasn't buying.

The terms of the deal are being kept confidential, however, a number of sources estimate it to be well over $100 million. That would make it one of the biggest profit settlements in Hollywood history.

Tolkien Trust, a UK-based charity controlled by the family who is the major beneficiary of the settlement, say they are pleased with the outcome: "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 out-of-court resolution finally clears the way for a two-film prequel based on Tolkien's novel 'The Hobbit'. It's an important development since the court ruled the failure to pay profits a material breach of contract, it would have allowed the family to take away rights to the film. The films will be executive produced by Peter Jackson and directed by Guillermo del Toro.

September 9, 2009 |

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