Royalties Payoff Promotes Hollywood Hobbits

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Family members of fantasy author J.R.R. Tolkien and HarperCollins have settled their royalties lawsuit with Time Warner, which gives the green light to MGM and Warner Bros. to proceed with filmed versions of "The Hobbit."

New Line Cinema, which Time Warner acquired in March 2008, was sued by the late author's relatives, who control the charitable Tolkien Trust, for $220 million in February 2008. The Tolkiens, who granted the rights to New Line to make the "Lord of the Rings" film trilogy, alleged they were entitled to 7.5 percent of the gross receipts of the films, which tallied an estimated  combined $6 billion gross in box office, merchandise, DVD and TV licensing, but received only $62,500 from New Line. The case was scheduled for trial in October.

Peter Jackson, director of the "Lord of the Rings" trilogy: "The Fellowship of the Ring"(2001),  "The Two Towers" (2002) and "The Return of the King" (2003), and trilogy producer Saul Zaentz each settled similar lawsuits with New Line for approximately $20 million each after condemning New Line's "tookish" conduct.

Jackson is the executive producer, and Guillermo del Toro is slated to direct film versions of Tolkien's "The Hobbit," the first of which is scheduled for release in December 2011. Tolkien's fantasy/children's novel originally was published in 1937.