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Teacher Settles ‘Fifty Shades’ Royalty Dispute

FORT WORTH, Texas (CN) - A Texas elementary school teacher settled her lawsuit against an Australian business partner who she claims cheated her out of millions of dollars in royalties from the bestselling book trilogy "Fifty Shades of Grey."

Jennifer Lynn Pedroza, of Arlington, sued Amanda M. Hayward and TCWS Operations Pty. Ltd. in Tarrant County District Court two years ago, accusing Hayward of "conning" Pedroza, one of her partners in The Writers Coffee Shop, the original publisher of the trilogy, which has been adapted into a series of movies.

In January, state District Judge Susan McCoy ordered Hayward to pay $10.6 million in royalties after a jury concluded Pedroza was cheated out of her fair share.

The settlement became public on Wednesday when McCoy set aside that judgment and dismissed Pedroza's claims with prejudice.

Terms of the settlement were not disclosed. However, a subsequent order by McCoy indicates Pedroza will receive at least $1.6 million from publisher Random House that was held by the court.

Pedroza had accused Hayward of engaging in "greed and self-dealing" in pushing her out.

"Without consulting her partner Pedroza, and without complying with Texas law, Hayward tried to convert Coffee Shop into TWCS, an Australian sole proprietorship that she, alone, owned," the complaint stated. "She signed a contract with Random House for the rights to the 'Fifty Shades' trilogy, in exchange for millions in advances and future royalties but, because of her chicanery, all payments flowed to her and not to the partnership."

Hayward allegedly had Pedroza and another partner sign "service agreements," and later fired both of them.

During trial, forensic accountants testified that Pedroza's 25 percent interest in the $41 million earnings of the book is worth $10.7 million.

Hayward's attorney, David Keltner in Fort Worth, declined to talk about how much money was paid.

"It is a good settlement from both parties' standpoint," he told the Fort Worth Star-Telegram.

Pedroza's attorney, Michael Farris in Dallas, also declined to discuss the settlement amount, telling the newspaper that "everyone is satisfied" with the deal.

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