New Line Cinema Corp

Clearing the way to move forward with its two planned films of "The Hobbit," Warner Bros. resolved a nasty legal battle with the heirs of J.R.R. Tolkien over profit from the "Lord of the Rings" films. Last year, two of Tolkien's children, Christopher, 84, and Priscilla, 80, sued New Line, now a unit of Warner Bros., for an estimated $150 million that they claimed was owed from the three "Lord of the Rings" movies, which amassed $2.96 billion at the worldwide box office and at least $3 billion in DVD and other ancillary sales, according to the lawsuit.

Roll the credits on New Line Cinema, the 40-year-old studio behind such iconic movie franchises as "The Lord of the Rings," "Austin Powers" and "A Nightmare on Elm Street." The company will lay off hundreds of employees between its Los Angeles and New York facilities and be merged into its corporate sibling, Warner Bros. The consolidation marks the end of the line for the once scrappy producer that prided itself on taking creative risks that other studios wouldn't.

If you want to win a bet in a bar full of industry insiders, you can stump 'em with this question: What's the hottest studio in town? The answer speaks volumes about the strange ways of Hollywood. It's New Line Cinema, the studio Time Warner essentially put out of business earlier this year, firing hundreds of employees along with studio founders Bob Shaye and Michael Lynne.

ON the wall of Bob Shaye's office at New Line Cinema is a letter from the Directors Guild of America, which has been on a campaign to protect filmmakers from bullying studio chiefs during the post-production process. The letter reminds Shaye, director of "The Last Mimzy," in theaters March 23, that he shouldn't let the studio interfere with his 10-week window to complete his cut of the movie. The DGA officer adds: "I understand you also have final cutting authority [on the film].

There's no denying that Hollywood worships sequels. New Line Cinema has taken the love affair one step further: It's cloning not a movie, but a movie launch. For the second time in six years, the studio has come to the Cannes Film Festival with a few minutes of an unfinished film in tow. It's to prove, yet again, that New Line not only hasn't trampled a beloved piece of fantasy literature, but also has turned out an impressive epic.

Fifteen New Zealand-based actors have filed suit against New Line Cinema, claiming the company that released Peter Jackson's blockbuster movie trilogy "The Lord of the Rings" hasn't reported net profit on the sale of the movies' merchandise such as video games, lunchboxes and T-shirts. The actors, who appear in one or more of the films, play various characters, including orcs, who inhabit author J.R.R. Tolkien's Middle-earth.

Russell Schwartz, longtime head of marketing for New Line Cinema is leaving the film distributor. Schwartz's departure has been rumored for months. New Line has suffered through a series of disappointing movies including "Snakes on a Plane" and "The Nativity Story." "Hairspray," currently out in theaters, has been the studio's one success of late. Schwartz will be departing after the release of "Rush Hour 3" which cost more than $125 million to produce.

IT'S not unusual for a studio marketing chief to get the boot after a string of box-office failures. But only at New Line Cinema, the studio that often seems to be operating in an alternate universe from the rest of the movie business, could the head of marketing be fired after opening the studio's biggest hit in two years.

Time Warner Inc.'s New Line Cinema unit must defend a lawsuit brought by "The Lord of the Rings" director Peter Jackson, who claims he hasn't received his share of the proceeds from the movie trilogy. Senior U.S. District Judge Ronald Lew denied eight of 11 requests by New Line for rulings that Jackson's claims don't represent genuine legal issues that need to be tried. Jackson sued New Line in 2005, claiming that the studio wrongly calculated his share of the proceeds.

Peter Jackson has scored a legal victory in his battle with New Line Cinema over the accounting of "The Lord of the Rings," with a federal magistrate hitting the studio with $125,000 in sanctions for failing to produce potential evidence. Jackson is suing New Line, contending that he had not received a fair and proper accounting of the first "Lord of the Rings" film's income, including DVD sales and foreign receipts.