Tolkien Lawsuit May Halt Production on Hobbit Films

New Line Studios has been sued by the estate of Lord of the Rings creator J.R.R. Tolkien, which claims that it has received no revenue from the estimated $6 billion the films have grossed worldwide, including DVD and merchandise sales. The lawsuit has the potential to block the two-movie Rings prequel based on The Hobbit, which was reportedly close to signing a director.

According to the lawsuit, which was filed last week, New Line was required to pay 7.5 percent of gross receipts to Tolkien's estate, The Tolkien Trust, and original Lord of the Rings publisher HarperCollins. The plaintiffs claim the only money they have received was an upfront payment of $62,500 for the three movies before production began.

The plaintiffs seek more than $150 million in compensatory damages, unspecified punitive damages, and a court order giving the Tolkien estate the right to terminate any rights New Line may have to make films based on other works by the author, including The Hobbit. Peter Jackson, director of the Lord of the Rings trilogy of films, recently signed on as executive producer of The Hobbit project, following the resolution of his own lawsuit against New Line regarding revenue from the films. The Hobbit was slated to begin production next year, with releases planned for 2010 and 2011.

"The Tolkien trustees do not file lawsuits lightly, and have tried unsuccessfully to resolve their claims out of court," Steven Maier, an attorney for the Tolkien estate based in Britain, said in a statement. "New Line has not paid the plaintiffs even one penny of its contractual share of gross receipts despite the billions of dollars of gross revenue generated by these wildly successful motion pictures." Maier also claims the film studio has blocked the Tolkien estate and the other plaintiffs from auditing the receipts of the last two films.