Lawsuit was seeking $150 million from New Line over gross-profit participation payments.
The Tolkien Trust, New Line Cinema, and HarperCollins Publishers Ltd. have resolved the lawsuit relating to the “Lord of the Rings” films, both sides announced on Tuesday.
The resolution means that "The Hobbit," the next in the series of phenomenally successful Tolkien properties, can move forward.
Filed in Los Angeles Superior Court in February of last year by the U.K.-based charity and HarperCollins, the lawsuit was seeking $150 million from New Line over claims that the trust had not received any gross-profit participation payments for the three films that originated from the "Lord of the Rings" trilogy.
The suit — which alleged breach of contract, breach of fiduciary duty and fraud — was also seeking punitive damages and a declaration from the court that the plaintiffs could axe New Line’s rights to any future Tolkien properties, including "The Hobbit."
Guillermo del Toro had been selected as the director of that film, which was meant to begin shooting next year.
The suit said the Tolkien trust is entitled to 7.5 percent gross profit participation as outlined in a 1969 agreement made with United Artists.
HarperCollins Publishers Ltd. and the trustees of the JRR Tolkien Estate were co-plaintiffs in the claim, which concerned participation interest in the “Lord of the Rings” films released between 2001 and 2003. The precise terms of the settlement are confidential.
Commenting on the settlement, Christopher Tolkien said: “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.’”
Warner Bros.’ President & Chief Operating Officer Alan Horn said: “We deeply value the contributions of the Tolkien novels to the success of our films and are pleased to have put this litigation behind us. We all look forward to a mutually productive and beneficial relationship in the future.”
The "Rings" trilogy has seen its fair share of litigation. In December 2005, director Peter Jackson settled with with New Line over claims he wasn’t paid properly. That lawsuit led New Line head Bob Shaye to claim he’d never work with Jackson again, although the filmmaker is set to produce "The Hobbit."
Producer Saul Zaentz, who used to own the film rights to the Tolkien books, has also sued New Line over profit participation — two times. In December 2007, he filed a suit claiming New Line wouldn’t give Zaentz’s auditors records so that the producer could conduct an audit to verify his profit participation statements.
The “Lord of the Rings” films produced by New Line are among the most successful films ever created and were released in 2001, 2002 and 2003 respectively.
JRR Tolkien is the author of works including “The Lord of the Rings” and “The Hobbit.” The Tolkien Trust is a U.K. registered charity that has made grants to charitable causes all over the world totaling over $8 million in the last five years alone.
His trust, run by his children in the U.K., supports causes including Asia Earthquake Appeal, the World Cancer Research Foundation, the Save the Children Fund and the Darfur Appeal.
Throughout its history, New Line has created a number of enduring film franchises, including the Lord of the Rings trilogy, “The Mask,” the Austin Powers titles, “Blade,” “Rush Hour,” “Elf,” “Sex and the City” and “Wedding Crashers.” New Line became a unit of Warner Bros. Entertainment in March 2008.