Chris Nashawaty
September 08, 2009 AT 08:11 PM EDT

The Hollywood studio behind a film based on The Hobbit and trustees for the estate of author J.R.R. Tolkien have settled a lawsuit that paves the way for a blockbuster based on the book, according to Reuters. Tolkien’s classic tale about Bilbo Baggins is the precursor to the Lord of the Rings trilogy, which was turned into a trio of box-office smashes directed by Peter Jackson. In February of 2008, the trustees of Tolkien’s estate filed a lawsuit against New Line (which, along with Entertainment Weekly, is a division of Time Warner), seeking $150 million in profits from the Rings movies, which it claimed it was owed. The suit also sought to block the filming of The Hobbit, which will be made into two films and will be directed by Guillermo del Toro (Hellboy, Pan’s Labyrinth). Financial details of the settlement were not disclosed, but the author’s son, Christopher Tolkien, said in a statement, “New Line may now proceed with its proposed films of The Hobbit.”

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