'Hobbit' Halt: Tolkien Heirs Sue New Line

In what may prove to be a hold-up for the long-awaited adaptation of "The Hobbit," the Tolkien Trust has sued New Line over alleged lack of profit participation in the "Lord of the Rings" movies.

The Tolkien Trust, a British charity managing the estate of the "Rings" author, is requesting more than $150 million in compensatory and punitive damages, plus the right to terminate any further rights New Line may have to the Tolkien works under the agreements. That would mean "The Hobbit," which was expected to be shot as back-to-back films, possibly directed by Guillermo Del Toro.

"The Tolkien trustees do not file lawsuits lightly, and have tried unsuccessfully to resolve their claims out of court. But in this case, New Line has left them no option at all," says Steven Maier, the Trust's UK-based attorney 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. 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 trustees explain that arrogance simply: The cumulative worldwide gross receipts for the three films in the "Lord of the Rings" franchise delivered nearly $6 billion in worldwide receipts and the Tolkien estate claims not to have received even a sliver of the pie.

"New Line has brought new meaning to the phrase 'creative accounting,'" says the Trust's domestic attorney Bonnie Eskenazi, who filed the suit on Monday (Feb. 11) in Los Angeles Superior Court. "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."

"The Hobbit" was only able to move forward into pre-production after Oscar-winning director Peter Jackson settled a 2005 law suit against New Line claiming he'd been stiffed on profit participation.

Previously, producer Saul Zaentz, former Tolkien properties rights holder, had sued New Line twice over -- you guessed it -- allegedly improper profit participation.

New Line offered no comment to the industry trade papers.