By DOMINIC PATTEN | Friday May 11, 2012 @ 7:39pm PDT

Paramount and the estate of Mario Puzo announced in a NYC court today that they’ve made a deal to allow a new Godfather prequel. Its profits will be put in escrow while they fight over who owns the publishing rights for a book that’s already out. The Depression-era The Family Corleone hit bookstores and online retailers on Tuesday. A source tells Deadline the son of Godfather author Mario Puzo agreed to the escrow arrangement “several weeks ago”. Anthony Puzo made the decision so Paramount wouldn’t prevent the book from coming out. It’s written by Ed Falco and “based on a screenplay by Mario Puzo” it says on the cover. Things could get more complicated if, as Paramount’s lawyer Richard Kendall noted today in Manhattan court, the book does well and “there’s an attraction to do a movie.”

In February, Paramount sued the Puzo estate to stop the publication of an “unauthorized” third Godfather sequel/prequel. The studio claimed the book tarnished the legacy of the studio’s films. In March, the Puzo estate countersued, claiming that the contract between Mario and the studio distinctly excluded book rights. The countersuit also claims that Paramount is in material breach of its contract with Mario Puzo. “We’re seeking cancellation of the contract,” Puzo lawyer Bert Fields reiterated to the judge today. Both lawyers have agreed to mediation to try to settle the matter. Judge Nathan said she may hold a hearing on Paramount’s motion to dismiss the countersuit later this year. The Godfather came out as in 1969 and became an instant bestseller. On the first of three Godfather movies, Puzo shared screenwriting credit with director Francis Ford Coppola for its release by Paramount in 1972.