Today we have some great news for those looking forward to the upcoming adaptation of The Hobbit (and who isn’t?): the project can officially go ahead as the Lord of the Rings lawsuit filed long ago by the Tolkien estate has now been settled.

The Hollywood Reporter is reporting that New Line Cinema, publisher Harper Collins and the Tolkien estate have come to an agreement in the lawsuit over profits from the three Lord of the Rings films. The quick overview of what the lawsuit was about is as follows: the Tolkien estate sued New Line for damages of at least $150 million because the studio failed to pay the 7.5% of gross receipts that they were supposed to get from what the three LOTR movies made, which combined came to about $6 billion (yowza!).

For their 20th birthday, Empire was given a few world exclusives including a chat with Guillermo Del Toro and Peter Jackson to discuss and confirm some details surrounding the upcoming pair of Hobbit films.

In the interview, Del Toro and Jackson confirmed that both movies will focus on the story of The Hobbit and that the second of the two would not be a “bridge” film – an idea which had been long-speculated and apparently planned prior.

It seems we may see some of our favorite hobbits make a return to the big screen among other potential returning characters in the upcoming Hobbit films (probably the second one IF it happens).

Back in August, we wrote about Peter Jackson and his two partners in crime finalizing their deal to write the two Hobbit films with Guillermo Del Toro. In that article, it was referenced that Del Toro promised some casting news by December… But that has come and gone and there hasn’t really been any official casting news as of yet.

Despite the fact that this belongs in the “Well, duh!” category, it’s still news nonetheless.

Deals have now been finalized (with the ink barely dry) for the Lord of the Rings writing trio of Peter Jackson, Fran Walsh and Philippa Boyens (who successfully adapted the Tolkien trilogy into a multi-billion dollar grossing franchise and a ton of Academy Awards) to perform scripting duties for its prequel The Hobbit and the currently untitled “bridge” film.

When it comes to these mega-budget blockbuster tentpoles, the actors generally tend to be the last to know anything.

Nonetheless, it’s always nice to get an update from one of them. The latest example comes from Sir Ian “I’m also Magneto” McKellen regarding The Hobbit and the Lord of the Rings “bridge” film; scheduled for Christmas 2010 and 2011 releases.

When asked about his participation in said films, he tells us:

“Yes I will, if Peter Jackson and I have anything to do with it, he being the producer and me being, on the whole, a very lucky actor.”

Has Sir Ian even been approached about any additional Middle-Earth outings to begin with? According to him:

This is BIG news on multiple levels if it turns out to be true. Marketsaw.com, a blog about 3D movies says the not only have New Line and Peter Jackson apparently worked out their differences, but that the Lord of the Rings prequel The Hobbit will be not one, but two movies. Not only that, but they will be shot in 3D!

Peter Jackson will indeed DIRECT The Hobbit! This is my second source telling me this. You can be 100% SURE that this is happening. The story will be split into two separate movies as was previously thought with the second relating much more to Lord of the Rings than the first. Wait, as if that wasn’t enough: Here is the kicker people: The Hobbit will be in 3D.

The sources of this info are the same ones that originated the recent Avatar alien image.

But wait, there’s more…

A little while back, Peter Jackson asked New Line Cinema to open their Lord of the Rings accounting books, to investigate some strange financial things. The head of the studio Bob Shaye refused, so Jackson filed a lawsuit to have the books opened to see if profits were hidden, after the studio refused to do so.

Shaye, whose New Line, by the way, is owned by Time Warner, then went on a public tirade against the man who made more money for Shaye’s company than Freddy Krueger.

When that happened, Jackson wished everyone the best on The Hobbit film and potential second Lord of the Rings prequel.

So when Jackson started shopping his The Lovely Bones project around, New Line was left out of the bidding. Bets were abound that Shaye would be fired from the company he founded.

Now, word has hit that New Line may be finally trying to make amends with Jackson as The Hobbit starts to get off the ground.