According to Michael Cieply at the The New York Times, only an ongoing union dispute in New Zealand stands in the way of production of The Hobbit starting in February. The financing between Warner Brothers' New Line Cinema and MGM for the two films has apparently been worked out and Peter Jackson's deal to direct has been finalized. So much for everyone worrying because Guillermo del Toro was off the project...
Meanwhile, The Wrap states that $30 million has already been spent on the project, with the total back-to-back production costing $400 million. Warner Brothers was nervous about moving ahead because of the financial trouble with MGM, but corporate takeover giant Carl Icahn backed a plan to have Lionsgate merge with MGM. As long as the MGM debtholders approve the plan, the merger should go forward.