The Hobbit Scrapped?

New Line Cinema is again finding itself on the wrong side of a lawsuit involving the lucrative Lord of the Rings trilogy. It seems that the Tolkien estate (a British charity named The Tolkien Trust) is alleging that the studio hasn't paid them the 7.5% of gross receipts contractually required for the use of the novels according to the Associated Press. They have decided, after reportedly spending years trying to negotiate a settlement, to bring a lawsuit.

This is not the first time that New Line has found itself facing a lawsuit over these movies. Saul Zaentz sued them alleging that they cheated him out of $20 million in royalties as did Peter Jackson (who only recently agreed to executive produce The Hobbit after reaching a settlement with New Line). The Tolkien Trust is seeking $150 million plus the right to terminate any rights to make more films based on Tolkien's works.

What does this mean for the future of The Hobbit? It is unclear. Obviously the Tolkien estate wants control over The Hobbit if for no other reason but to leverage it into a better deal over what will likely be a very lucrative two movie series. It seems unlikely that they would scrap the project simply out of spite. As fans, we shall be watching this story very closely.