Tolkien Estate Settles L-O-T-R Trilogy Lawsuit

Almost a year ago, on September 27, 2008, I did a post in which I talked about "Hollywood accounting," the practice of using creative bookkeeping to turn a blockbuster film into a loss on paper.

That post was prompted by a ruling in the lawsuit brought by the family of J.R.R. Tolkien and HarperCollins against New Line Cinema for failure to pay royalties on the Lord of the Rings film trilogy. A Los Angeles Superior Court judge barred the family from suing for punitive damages in that lawsuit while clearing the way for the heirs to continue their $150 million fraud suit against the studio.

On Tuesday, New Line Cinema settled that lawsuit with the Tolkien Estate and HarperCollins. According to the Los Angeles Times:

The suit sought to block production of "The Hobbit" films until those claims were resolved. The three films, which were released in 2001, 2002 and 2003, amassed close to $3 billion in worldwide ticket sales. Terms of the settlement were not disclosed.

Both sides expressed pleasure over the settlement. A follow-up story in the L.A. Times yesterday had this to say:

The lawsuit . . . was settled in the nick of time. Not only were the plaintiffs scheduled to go to trial Oct. 19, but the two "Hobbit" movies are slated to go into production next year with director Guillermo del Toro and producer Peter Jackson.

Go here to read my post from last year, explaining the background to this lawsuit and what writers need to know about "Hollywood accounting."

Go here and here to read the two articles in the Los Angeles Times about the settlement.