News is just coming in that the Times and P-I have settled their differences and, for now, both papers will continue to publish under their joint operating agreement. More details here and here. Also, here's this from the P-I story:
All outstanding litigation has been settled, and the Hearst Corp. will end its 32 percent contingent interest in the joint-operating agreement for the two newspapers. That 32 percent interest is what Heast would get if the P-I folded and the JOA continued.
Hearst will pay the Seattle Times $25 million in exchange for the newspaper to agree not to issue any loss notice until at least 2016, according to a Hearst press release.
As part of the settlement, The Seattle Times Co. will give Hearst $49 million to resolve all current claims and to buy back the 32 percent contingent interest, said Paul Luthringer, a Hearst spokesman.
The P-I says the deal also calls for a Times Co. executive to work on P-I circulation and subscription issues. The P-I will receive "equal treatment" with production, especially with quality and color capacity. Newspaper delivery trucks will be repainted with both of the newspaper names or "equal co-branding", and Hearst reserves the right to take future disagreements to arbitration.
Read Hearst's press release on Romenesko. Earlier Weekly stories on the now-scrapped legal battles here and here.
Update: Times is a finalist but not a winner in 2007 Pulitzer Prizes awarded today.