The Hollywood studio behind a film based on The Hobbit and trustees for author J.R.R. Tolkien's estate have settled a lawsuit that clears the way for a movie based on the book.
Trustees of the Tolkien estate last year filed a lawsuit against New Line Cinemas, seeking more $US150 million in profits from the Lord of the Rings movies it claimed it was owed.
Those films, directed by New Zealand's Peter Jackson, made about $US2.9 billion worldwide.
The lawsuit also sought to block filming of The Hobbit, which will now be made into two movies by Guillermo del Toro, the filmmaker behind Pan's Labyrinth. Peter Jackson will co-write and co-produce the films.
Financial terms of the settlement were not released, but the author's son, Christopher Tolkien, says it does allow New Line to proceed with its proposed films of 'The Hobbit.'"
The Hobbit, a 1937 book by Tolkien about a diminutive character named Bilbo Baggins who goes on a treasure-seeking adventure, sets the stage for Tolkien's The Lord of the Rings trilogy.