Bauer Martinez Entertainmentand film-maker John McTiernan have settled the litigation between them thatarose over the project Crash Bandits which McTiernan was to have directed for Bauer Martinez.

The two parties have agreedto the dismissal of the April 26, 2006, complaint by Bauer Martinez and thesubsequent counterclaim by McTiernan.

"Bauer Martinez and JohnMcTiernan acknowledge that the litigation was a result of a misunderstandingand that the parties have resolved their differences," a statement declared."No monies were paid by either John McTiernan or Bauer Martinez to the other inconnection with the settlement."

The breach-of-contract suitwas filed by Bauer Martinez when McTiernan was found guilty of not disclosingthe fact that he had hired private investigator Anthony Pellicano to the FBI.

Bauer Martinez demanded thatthe director return his fee and damages of $2m for failing to disclose hisinvolvement in the Pellicano case.