While back in July we showed you pictures of them reconstructing ‘The Shire’ in preparation of filming and then we told you that ‘The Hobbit’ may not happen because of a lawsuit brought against New Line and their parent company Time Warner by the Tolkien Estate.

Now, we have official word from the Tolkien Trust that they have settled with New Line & HarperCollins Publishers Ltd.

The Tolkien Trust (a UK registered charity), New Line Cinema, and HarperCollins Publishers Ltd. have resolved the lawsuit relating to the “Lord of the Rings” films.

The claim was filed in February of last year. HarperCollins Publishers Ltd. and the trustees of the JRR Tolkien Estate were co-plaintiffs in the claim, which concerned plaintiffs’ participation interest in the “Lord of the Rings” films released between 2001 and 2003. The precise terms of the settlement are confidential.

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.

Commenting on the settlement, 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. The Trustees acknowledge that New Line may now proceed with its proposed films of ‘The Hobbit.'”

The “Lord of the Rings” films produced by New Line are among the most successful films ever created and were released in 2001, 2002 and 2003, respectively.

JRR Tolkien is the world-renowned author of works including “The Lord of the Rings” and “The Hobbit.” The Tolkien Trust is a UK registered charity that has made grants to charitable causes all over the world totaling over $8 million in the last five years alone.

New Line became a unit of Warner Bros. Entertainment in March 2008