The Los Angeles Times reports that New Line Cinema is looking to better their relationship with director Peter Jackson:

Eager to move ahead with The Hobbit, New Line has quietly been trying to mend fences with Rings filmmaker Peter Jackson, who has sued the company over his share of profits from the first Rings films. When asked if it was true that company insiders had been in talks with Jackson's reps, Shaye replied, "Yes, that's a fair statement. Notwithstanding our personal quarrels, I really respect and admire Peter and would love for him to be creatively involved in some way in The Hobbit."
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This tidbit of news brings some glimmer of hope to the Lord of the Rings fans who feel that the only director who should direct The Hobbit is Peter Jackson.