The heirs of Lucy Maud Montgomery, the author of Anne of Green Gables, won a legal victory last month when a judge threw out a $55-million libel lawsuit against them.

Kevin Sullivan of Sullivan Entertainment, the producer of the television franchise about the dreamy red-haired orphan from Prince Edward Island, launched the suit in 1999 after Montgomery’s heirs announced details of their ongoing claim against him at a public news conference. The heirs claimed that Sullivan withheld profits from two MOWs in the 1980s and forestalled their requests for a financial audit.

Sullivan Entertainment was set to go public at the time, and argued that the claims ruined an initial public offering and thwarted the company’s plans to expand internationally.

According to reports, Madam Justice Jean MacFarland of the Ontario Superior Court of Justice ruled that the heirs’ public statements were not libelous because they were possible. In her written ruling, MacFarland said that Sullivan was evasive and did not respond to questions directly.

Defense lawyers said in their closing arguments that deceitful accounting and evasive testimony were among reasons to dismiss the lawsuit. They also argued that because 40 requests for an audit in the 1990s were ignored, the heirs had the right to air their concerns in public.

Under the terms of a 1984 contract with Sullivan, Montgomery’s heirs were entitled to financial remuneration of 10% of net profits from the two MOWs. They were also entitled to an independent audit of Sullivan’s financial records. Sullivan claimed that the movies did not make a profit.

Both sides agreed that Sullivan paid the heirs $425,000 for the first movie and $100,000 for the second. But the family never saw a percentage of the profit.

Both lawyers are to submit legal fees so that MacFarland can decide who should foot the bill for legal costs. Sullivan reportedly budgeted approximately $700,000 for the legal battle against Montgomery’s heirs.