THE LORD OF THE RINGS - TOLKIEN ESTATE LAUNCHES LEGAL ACTION AGAINST NEW LINE

TOLKIEN ESTATE LAUNCHES LEGAL ACTION AGAINST NEW LINE

New Line Cinema, the film studio responsible for the Lord of the Rings trilogy, is being sued for $150 million (£76.8 million) by estate of JRR Tolkien.

The Tolkien Trust, a charity responsible for managing the author's estate, filed the suit in the Los Angeles superior court on Monday, alleging that New Line has failed to pay royalty payments from the $6 billion (£3 billion) made by the three films based on Tolkien's books.

The suit seeks $150 million (£76.8 million) in compensatory damages, as well as punitive damages and, crucially, the termination of any rights New Line may have to the works of Tolkien, which could jeopardise The Hobbit, the prequel due to be produced by Lord of the Rings director Peter Jackson.

Steven Maier, the trustees' UK lawyer, stressed that the lawsuit was not embarked upon lightly, adding that the Tolkien Trust had attempted unsuccessfully to resolve the dispute out of court.

"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," he explained.

"To make matters worse, to date New Line has even prevented the plaintiffs from auditing the last two films of the series. The trustees are very aggrieved by New Line's arrogance."

The action alleges breach of contract on the part of New Line, explaining that their assumption of the 1969 deal signed by Tolkien and United Artists - passing to Saul Zaentz, Miramax and finally New Line - made them responsible for providing the trust with 7.5 per cent of profits produced from films based on the author's work.

Filing the complaint, Bonnie Eskenazi, the trustees' US counsel, added: "New Line has brought new meaning to the phrase 'creative accounting.'

"I cannot imagine how on earth New Line will argue to a jury that these films could gross literally billions of dollars, and yet the creator's heirs, who are entitled to a share of gross receipts, don't get a penny."

A lengthy dispute between New Line and Jackson regarding profit participation was finally settled in December last year.