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The Hobbit finally has a full-fledged green light. You may have forgotten amidst the casting news and slew of rumors, but The Tolkien Trust was battling it out with New Line Cinema in court for failing to pay 7.5 percent of the gross receipts from the Lord of the Rings films. The parties have since settled their differences and now the project it lawsuit-free.

The trustees of the JRR Tolkien Estate and HarperCollins Publishers Ltd. filed the claim against New Line in February of 2008. Last year, when asked about J.R.R. Tolkien’s son’s stance on the making of his version of The Hobbit, Peter Jackson explained, “Christopher Tolkien did not wish to be involved in the LOTR movies and I would assume his feelings are the same with these two films.” Whether or not Christopher is please with The Hobbit hitting the big screen, the warring parties have officially reached a settlement and production on the film may proceed.

Details of the settlement are confidential, but 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.” 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.”

Now that’s the ultimate happy ending.