A judge has hit New Line Cinema with a $125,000 fine after the studio failed to preserve documents and e-mails it had been ordered to save as part of a legal dispute with director Peter Jackson over the accounting for earnings from the first part of The Lord of the Rings movie trilogy.

Jackson has sued New Line over the accounting for DVD sales, foreign box office tickets and other proceeds from the Academy Award-winning The Lord of the Rings: The Fellowship of the Ring. U.S. Magistrate Judge Stephen J. Hillman ordered New Line in July of last year to provide sales and licensing documents. But he found that the studio instead has been continuing to purge documents and e-mail messages on a regular basis, according to the Los Angeles Times.

The judge ordered the studio to hire an external document retrieval company to get back the evidence. Jackson stands to win tens of millions of dollars of damages in his lawsuit against New Line.

The dispute has contributed to delays in his production of another J.R.R. Tolkien novel, The Hobbit, for the same studio.

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