Senator Entertainment and subsidiary X Filme Creative Pool have buried the hatchet after a two-year ownership dispute.

Companies on Friday announced they had reached an out-of-court settlement, ending a legal spat that began in 2004 following Senator’s insolvency.

X Filme shareholders, including directors Wolfgang Becker (“Good Bye Lenin!”), Tom Tykwer (“Perfume: The Story of a Murderer”), Dani Levy “(“Go for Zucker”) and producer Stefan Arndt, had tried to reacquire the 56.1% stake held by Senator after it went bust.

Senator took legal action to stop that. Fearing their artistic independence would be compromised, Becker, Levy and Tykwer set up a new company — the aptly-named Y Filme.

Under the new agreement, Senator will retain its stake in X Filme, and both companies will continue to produce and distribute films independently.

The settlement is a victory for Senator, which was loath to part with one of Germany’s most successful producers and a high-profile company with international brand recognition.

While companies declined to provide further details of the settlement, X Filme has at least gained artistic and corporate independence.

X Filme’s relationship with Senator began in 2000, when Senator bought a stake in it. At the time, it made sense for both: Senator wanted to make English-language films out of its Los Angeles subsidiary, while X Filme was focusing on domestic product.

Yet X Filme quickly overtook its parent, growing domestically and internationally, while Senator suffered the fate of other Neuer Markt wonders following the burst of Germany’s media bubble.

Local media attorney Helge Sasse and L.A.-based producer Marco Weber took over Senator last year from Deutsche Bank, breathing new life into it and seeking a peaceful resolution with X Filme.

Sasse, a prominent media attorney and one of the founders of German musicvid channel Viva, and Weber have also lured high-profile execs to the company, including supervisory board chairman Thomas Middelhoff, former topper of Bertelsmann and current CEO of retail giant KarstadtQuelle.

X Filme toppers Arndt and Manuela Stehr welcomed the settlement: “We’re glad that both sides no longer have to waste their energy on finding solutions to open questions but can rather focus on the real work — producing films that move people.”

Becker, Levy and Tykwer described the settlement as “fair and fitting well with our company.”